Working Paper
Income Risk, Saving and Taxation:Will Precautionary Saving Survive?
Stefan Arent, Alexander Eck, Michael Kloß, Oskar Krohmer
Ifo Institute, Munich, 2012
Ifo Working Paper No. 125
Ifo Institute, Munich, 2012
Ifo Working Paper No. 125
![](https://www.ifo.de/DocImg/IfoWorkingPaper-125.jpg?c=1689237177)
Former theoretical and empirical studies find that precautionary savings are reduced in the presence of social security systems. The saving motive, however, does not change: individuals respond to increasing income risk by increasing their savings. Although this still holds for common tax and transfer systems, we show that this is not a feature of all tax and transfers systems. In contrast to former studies, we focus on the impact of the variability of future income (higher degree risk).
Schlagwörter: Income risk, saving behavior, social security, unemployment benefit, taxation
JEL Klassifikation: D110, D310, D910, H240, H310