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Title:Risk and saving in two-person households: More scope for precautionary saving PDF Logo
Authors:Apps, Patricia
Andrienko, Yuri
Rees, Ray
Issue Date:2012
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6824
Abstract:The existing literature suggests that when the saving decision of two-earner households under risk is analysed, standard results on the existence of precautionary saving no longer apply: precautionary saving is obtained if and only if very stringent conditions hold. This paper shows that when the two-earner household's saving decision is formulated more generally, standard assumptions suffice for precautionary saving to exist under increases in risk of the first and second orders, but not for higher orders.
Subjects:two-earner households
risk order
precautionary saving
JEL:D10
D13
D14
D81
D91
E21
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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