Thanks to mass requests to name the authors of the stupid abstract that
"explains" the low bank balance of poor people by pointing to asset limits
on welfare eligibility, here the context and the full entry.
Doug
--
Doug Henwood
[[EMAIL PROTECTED]]
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
---------------------------------------------------------------------------
Date: Thu, 9 Mar 1995 14:18:14 -0500
Reply-To: Financial Economics Network <[EMAIL PROTECTED]>
Sender: Financial Economics Network <[EMAIL PROTECTED]>
From: Wayne Marr <[EMAIL PROTECTED]>
Subject: JFA-D: Banking, Economics, and Methodology, 3/10/95
============================================================
JOURNAL OF FINANCIAL ABSTRACTS: SERIES D
*** BANKING, ECONOMICS, AND METHODOLOGY ***
WORKING PAPER HIGHLIGHTS
Volume 2 Number 9D: March 10, 1995
============================================================
[boring abstracts deleted]
"Precautionary Saving and Social Insurance" (Rodney L.
White Center for Financial Research Working Paper
No. 3-95)
R. GLENN HUBBARD Columbia University
and NBER
JONATHAN SKINNER University of Virginia
and NBER
STEPHEN P. ZELDES University of Pennsylvania
and NBER
"Precautionary Saving and Social Insurance" (Rodney L.
White Center for Financial Research Working Paper No. 3-95)
BY: R. GLENN HUBBARD, JONATHAN SKINNER, and STEPHEN P.
ZELDES
CONTACT: STEPHEN P. ZELDES
E-MAIL: [EMAIL PROTECTED]
POSTAL: The Wharton School of the University of
Pennsylvania, Finance Department, Suite 2300
Steinberg-Dietrich Hall, Philadelphia,
PA 19104-6367
PHONE: (215) 898-3477
FAX: (215) 898-6200
OTHER: Not Available
REF: WPS95-277D
PAPER REQUESTS: Betsey Schmidt, E-MAIL: schmidt@
wharton.upenn.edu POSTAL: Rodney L. White Center
for Financial Research, The Wharton School, University
of Pennsylvania, Philadelphia, PA 19104-6367, PHONE:
(215) 898-7616 FAX: (215) 573-8084
Microdata studies of household saving often find a
significant group in the population with virtually no
wealth, raising concerns about heterogeneity in motives for
saving. In particular, this heterogeneity has been
interpreted as evidence against the life-cycle model of
saving. This paper argues that a life-cycle model can
replicate observed patterns in household wealth accumulation
after accounting explicitly for precautionary saving and
asset-based means-tested social insurance. We demonstrate
theoretically that social insurance programs with means
tests based on assets discourage saving by households with
low expected lifetime income. In addition, we evaluate the
model using a dynamic programming model with four state
variables. Assuming common preference parameters across
lifetime-income groups, we are able to replicate the
empirical pattern that low-income households are more likely
than high-income households to hold virtually no wealth.
Low wealth accumulation can be explained as a utility-
maximizing response to asset-based means-tested welfare
programs.
JEL Classification: D91
[more stuff deleted]
============================================================
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[end of excerpt]
