Precautionary savings and the self-employed

This work focuses on the impact of uncertainty on savings under bequest form. Specifically, we estimate whether and to what extent income variability does have an effect on post-mortem savings. We approximate the post-mortem savings with the closest dedicated savings, which is savings in term insura...

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Bibliographic Details
Published in:Small business economics 2018-06, Vol.51 (1), p.105-127
Main Authors: Rossi, Mariacristina, Sansone, Dario
Format: Article
Language:English
Subjects:
Bequests
Business and Management
Employment status
Entrepreneurship
Industrial Organization
Insurance
Management
Microeconomics
Ownership
Savings
Self employment
Term insurance
Uncertainty
Variability
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Summary:This work focuses on the impact of uncertainty on savings under bequest form. Specifically, we estimate whether and to what extent income variability does have an effect on post-mortem savings. We approximate the post-mortem savings with the closest dedicated savings, which is savings in term insurance, a lump sum inherited at the death of the subscriber. Furthermore, we test whether the intensity of the income variance or the riskiness of the job type—such as selfemployment—matters more in the choice. Our results show that self-employment status is one of the most relevant variables affecting term insurance ownership.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-017-9919-x