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Poor and wealthy hand-to-mouth households in Belgium

Author

Listed:
  • Laurens Cherchye

    (Department of Economics, University of Leuven (KU Leuven). E. Sabbelaan 53, B-8500 Kortrijk, Belgium.)

  • Thomas Demuynck

    (ECARES, Université Libre de Bruxelles. Avenue F. D. Roosevelt 50, CP 114, B-1050 Brussels, Belgium.)

  • Bram De Rock

    (ECARES, Université Libre de Bruxelles and Department of Economics, University of Leuven (KU Leuven). Avenue F. D. Roosevelt 50, CP 114, B-1050 Brussels, Belgium.)

  • Mariia Kovaleva

    (ECARES, Université Libre de Bruxelles and Department of Economics, University of Leuven (KU Leuven). Avenue F. D. Roosevelt 50, CP 114, B-1050 Brussels, Belgium.)

  • Geoffrey Minne

    (Economics and Research Department, National Bank of Belgium)

  • Maite De Sola Perea

    (Economics and Research Department, National Bank of Belgium)

  • Frederic Vermeulen

    (Department of Economics, University of Leuven (KU Leuven). Naamsestraat 69, B-3000 Leuven, Belgium)

Abstract

We identify the population shares of poor hand-to-mouth households, wealthy hand-to-mouth households and non hand-to-mouth households in Belgium. We apply the methodology proposed by Kaplan and Violante (2014) and Kaplan, Violante and Weidner (2014) to the Belgian component of the Household Finance and Consumption Survey. We find that the fraction of hand-to-mouth households in Belgium is substantial and predominantly consists of wealthy hand-to-mouth households. We also compare the observable characteristics and marginal propensities to consume (MPCs) of the three household types We find that Belgian wealthy hand-to-mouth households have characteristics that resemble those of the non hand-to-mouth households, while their MPCs are often more similar to those of the poor hand-to-mouth households. This pleads for giving a unique place to each type of households when evaluating the effects of fiscal policy

Suggested Citation

  • Laurens Cherchye & Thomas Demuynck & Bram De Rock & Mariia Kovaleva & Geoffrey Minne & Maite De Sola Perea & Frederic Vermeulen, 2023. "Poor and wealthy hand-to-mouth households in Belgium," Working Paper Research 432, National Bank of Belgium.
    • Handle: RePEc:nbb:reswpp:202302-432
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    References listed on IDEAS

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    More about this item

    Keywords

    : savings; hand-to-mouth households; liquidity; marginal propensity to consume (MPC;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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