Les Français sont-ils prudents? Patrimoine et risque sur le marché du travail

Abstract

Precautionary savings have been advanced as one of the main drivers of wealth accumulation. However its quantification remains elusive: simulation methods that calibrate life-cycle models on income data find a 50% share of precautionary assets in total assets, while econometric studies suggest a range of 1-20%. Our study quantifies the precautionary saving motive from the INSEE’s 2004 Household Assets Survey exploiting variation in individual responses to questions eliciting quantitatively the subjective evolution of household income risk over a five year horizon, including the probability of losing one’s job. The precautionary-saving motive seldom exceeds 10% of financial/total wealt