Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89879
Authors: 
Cobb-Clark, Deborah A.
Kassenböhmer, Sonja C.
Sinning, Mathias
Year of Publication: 
2013
Series/Report no.: 
IZA Discussion Paper 7837
Abstract: 
This paper analyzes the relationship between individuals' locus of control and their savings behavior, i.e. wealth accumulation, savings rates, and portfolio choices. Locus of control is a psychological concept that captures individuals' beliefs about the controllability of life events and is a key component of self-control. We find that households with an internal reference person save more both in terms of levels and as a percentage of their permanent incomes. Although the locus-of-control gap in savings rates is largest among rich households, the gap in wealth accumulation is particularly large for poor households. Finally, households with an internal reference person and average net worth hold significantly less financial wealth, but significantly more pension wealth, than otherwise similar households with an external reference person.
Subjects: 
non-cognitive skills
locus of control
wealth accumulation
asset portfolios
savings
JEL: 
G02
G11
I31
R21
Document Type: 
Working Paper

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