IDEAS home Printed from https://ideas.repec.org/a/bla/revinw/v45y1999i3p339-352.html
   My bibliography  Save this article

The Wealth Effects Of Income Insurance

Author

Listed:
  • Edward J. Bird
  • Paul A. Hagstrom

Abstract

Precautionary savings models suggest that wealth should rise with income risk. Risk is reduced by means‐tested transfers, however, which implies that transfer programs should discourage private wealth accumulation. We offer a comprehensive empirical assessment based on variation across states in the generosity of a number of programs, specifically unemployment insurance and means‐tested transfers (Aid to Families with Dependent Children and Food Stamps). We use monthly data on married couples from the Survey of Income and Program Participation (SIPP) to regress wealth on income, income risk, and various measures of transfer generosity. The results support the precaution‐ary savings model and reveal moderate negative wealth effects of both unemployment insurance and means‐tested transfers, with an elasticity of about −0.18.

Suggested Citation

  • Edward J. Bird & Paul A. Hagstrom, 1999. "The Wealth Effects Of Income Insurance," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(3), pages 339-352, September.
    • Handle: RePEc:bla:revinw:v:45:y:1999:i:3:p:339-352
    DOI: 10.1111/j.1475-4991.1999.tb00344.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4991.1999.tb00344.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4991.1999.tb00344.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yann Algan & Arnaud Cheron & Jean-Olivier Hairault & Francois Langot, 2003. "Wealth Effect on Labor Market Transitions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(1), pages 156-178, January.
    2. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications - Books, The World Bank Group, number 14922.
    3. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers and Notes 25529, The World Bank.
    4. Yavuz Arslan & Ahmet Degerli & Gazi Kabas, 2019. "Unintended Consequences of Unemployment Insurance Benefits: The Role of Banks," Swiss Finance Institute Research Paper Series 19-44, Swiss Finance Institute.
    5. Weikard Hans-Peter, 2004. "Poverty Measurement Under Income Risk / Armutsmessung bei Einkommensrisiken," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 224(3), pages 337-350, June.
    6. Edward J. Bird, "undated". "Does the Welfare State Induce Risk Taking?," Wallis Working Papers WP11, University of Rochester - Wallis Institute of Political Economy.
    7. Eric Levin & Robert Wright, 2001. "Unemployment insurance, moral hazard, and economic growth," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(4), pages 373-384, November.
    8. Bourdeau-Brien, Michael & Kryzanowski, Lawrence, 2020. "Natural disasters and risk aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 818-835.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:revinw:v:45:y:1999:i:3:p:339-352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iariwea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.