How certain are Dutch households about future income? An emprical analysis

J.W.M. Das, A.C.D. Donkers

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Abstract

The precautionary saving literature shows that income uncertainty increases savings and wealth. To estimate the magnitude of this effect, we need a measure of income uncertainty. This paper empirically analyzes subjective income uncertainty in the Netherlands. Data come from a large Dutch household survey. We measure income uncertainty by asking questions on expected household income in the next twelve months. First, we describe the data and investigate the relationship between the measure of income uncertainty and a number of household characteristics. Controlling for information on expected income changes, we find strong relationships between labor-market characteristics and the subjective income uncertainty as reported by the heads of the households. Second, we compare income uncertainty in the Netherlands with income uncertainty in the US and Italy. It turns out that perceived income uncertainty is smaller in the Netherlands than it is in the US.
Original languageEnglish
Pages (from-to)17
Number of pages17
JournalThe Review of Income and Wealth
Publication statusPublished - 1996

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Income
Household
Income uncertainty
The Netherlands
Uncertainty
Market characteristics
Italy
Wealth
Household income
Precautionary saving
Labour market
Savings

Cite this

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How certain are Dutch households about future income? An emprical analysis. / Das, J.W.M.; Donkers, A.C.D.

In: The Review of Income and Wealth, 1996, p. 17.

Research output: Contribution to journalArticleProfessional

TY - JOUR

T1 - How certain are Dutch households about future income? An emprical analysis

AU - Das, J.W.M.

AU - Donkers, A.C.D.

N1 - Pagination: 17

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Y1 - 1996

N2 - The precautionary saving literature shows that income uncertainty increases savings and wealth. To estimate the magnitude of this effect, we need a measure of income uncertainty. This paper empirically analyzes subjective income uncertainty in the Netherlands. Data come from a large Dutch household survey. We measure income uncertainty by asking questions on expected household income in the next twelve months. First, we describe the data and investigate the relationship between the measure of income uncertainty and a number of household characteristics. Controlling for information on expected income changes, we find strong relationships between labor-market characteristics and the subjective income uncertainty as reported by the heads of the households. Second, we compare income uncertainty in the Netherlands with income uncertainty in the US and Italy. It turns out that perceived income uncertainty is smaller in the Netherlands than it is in the US.

AB - The precautionary saving literature shows that income uncertainty increases savings and wealth. To estimate the magnitude of this effect, we need a measure of income uncertainty. This paper empirically analyzes subjective income uncertainty in the Netherlands. Data come from a large Dutch household survey. We measure income uncertainty by asking questions on expected household income in the next twelve months. First, we describe the data and investigate the relationship between the measure of income uncertainty and a number of household characteristics. Controlling for information on expected income changes, we find strong relationships between labor-market characteristics and the subjective income uncertainty as reported by the heads of the households. Second, we compare income uncertainty in the Netherlands with income uncertainty in the US and Italy. It turns out that perceived income uncertainty is smaller in the Netherlands than it is in the US.

M3 - Article

SP - 17

JO - The Review of Income and Wealth

JF - The Review of Income and Wealth

SN - 0034-6586

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