-
Views
-
Cite
Cite
John A. James, Michael G. Palumbo, Mark Thomas, Consumption smoothing among working-class American families before social insurance, Oxford Economic Papers, Volume 59, Issue 4, October 2007, Pages 606–640, https://doi.org/10.1093/oep/gpm007
Close - Share Icon Share
Abstract
This paper examines the saving decisions of a large sample of turn-of-the-century working-class American families. We decompose each family's reported income into permanent and transitory components and then estimate marginal propensities to save from each component. Marginal propensities to save out of transitory income are large relative to the propensities based on permanent income, though the former lie much below one and the latter much above zero, remarkably similar to results based on contemporary data sets. Smoothing appears to have been primarily at medium rather than low frequencies, more consistent with precautionary than with life-cycle motives.
