Full Citation

Title: Were Nineteenth-Century Industrial Workers Permanent Income Savers?

Citation Type: Journal Article

Publication Year: 2019

ISBN:

ISSN: 00384038

DOI: 10.1002/soej.12335

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Abstract: Theories of household saving posit that households add to or draw down wealth to equalize the discounted present value of consumption over time. This article examines the extent to which 19th century urban American industrial workers saved and dissaved to smooth consumption in response to unanticipated, plausibly exogenous, shocks to income. Information on the expected and unexpected number of days unemployed is used to construct estimates of transitory income. The data are then used to estimate the marginal propensity to save from transitory income. The results are broadly consistent with Friedman's () permanent income hypothesis in that the marginal propensity to consume from transitory income is about twice that of nontransitory income.

Url: https://onlinelibrary.wiley.com/doi/abs/10.1002/soej.12335

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Authors: Bodenhorn, Howard

Periodical (Full): Southern Economic Journal

Issue: 4

Volume: 85

Pages: 1286-1310

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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