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ResearchPaper
2016
How important is precautionary labor supply?
How important is precautionary labor supply?
Abstract (English)
We quantify the importance of precautionary labor supply using data from the German Socio-Economic Panel (SOEP) for 2001-2012. We estimate dynamic labor supply equations augmented with a measure of wage risk. Our results show that married men choose about 2.5% of their hours of work or one week per year on average to shield against unpredictable wage shocks. This implies that about 26% of precautionary savings are due to precautionary labor supply. If self-employed faced the same wage risk as the median civil servant, their hours of work would reduce by 4%.
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Publication series
Hohenheim discussion papers in business, economics and social sciences; 2016,07
Published in
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Faculty
Faculty of Business, Economics and Social Sciences
Institute
Institute of Economics
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Cite this publication
Schmitz, S., Rostam-Afschar, D., & Jessen, R. (2016). How important is precautionary labor supply? https://hohpublica.uni-hohenheim.de/handle/123456789/6036
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Language
English
Publisher
Publisher place
Classification (DDC)
330 Economics
Original object
University bibliography
Free keywords
Wage risk Labor supply Precautionary saving Life cycle Dynamic panel data
Standardized keywords (GND)
Lohn Arbeit Arbeitsmarkt Sparverhalten Deutschland
Sustainable Development Goals
BibTeX
@techreport{Schmitz2016,
url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6036},
author = {Schmitz, Sebastian and Rostam-Afschar, Davud and Jessen, Robin et al.},
title = {How important is precautionary labor supply?},
year = {2016},
school = {Universität Hohenheim},
series = {Hohenheim discussion papers in business, economics and social sciences},
}