Do labour market institutions influence consumers' saving intentions? Aggregate evidence from Europe

Arbeitspapier

Intertemporal decision making of a private household depends on its expected income distribution. Since an important feature of labour market institutions in modern welfare states is to provide cash transfers as income replacement in case of unemployment, it is hypothesised that unemployment benefits reduce the motive to save for precautionary reasons. Based on consumer sentiment data from the European Commission's consumer survey, this paper provides evidence that aggregate saving intentions are significantly influenced by unemployment benefits. It can be shown that higher benefits lower the intention to save.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAAEG Discussion Paper Series ; No. 04/2011

Classification and Topics

• Classification: Wirtschaft ; Unemployment Insurance; Severance Pay; Plant Closings ; Macroeconomics: Consumption; Saving; Wealth ; Consumer Economics: Empirical Analysis ; Expectations; Speculations
• Subject: Labour market institutions ; Unemployment benefits ; Precautionary savings ; Consumer confidence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ahrens, Alexander
• Event: Veröffentlichung
• (who): University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU)
• (where): Trier
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51390
• Last update: 10.03.2025, 11:43 AM CET