Dynastic Precautionary Savings

• Corina Boar ^[1]
  1. [1] New York University

     New York University

     Estados Unidos

     
• Localización: Review of economic studies, ISSN 0034-6527, Vol. 88, Nº 6, 2021, págs. 2735-2765
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • This article documents that parents accumulate savings to insure their children against income risk. I refer to this behaviour as dynastic precautionary saving. Using a sample of matched parent–child pairs from the Panel Study of Income Dynamics, I test for dynastic precautionary savings by examining the response of parental consumption to the child’s permanent income uncertainty. I exploit variation in permanent income risk across age and industry–occupation groups to confirm that, all else equal, higher uncertainty in the child’s permanent income depresses parental consumption, indicating a precautionary saving motive across generations.