Dynastic Precautionary Savings

Corina Boar

    Research output: Contribution to journalArticlepeer-review


    This article documents that parents accumulate savings to insure their children against income risk. I refer to this behaviour as dynastic precautionary saving. Using a sample of matched parent-child pairs from the Panel Study of Income Dynamics, I test for dynastic precautionary savings by examining the response of parental consumption to the child's permanent income uncertainty. I exploit variation in permanent income risk across age and industry-occupation groups to confirm that, all else equal, higher uncertainty in the child's permanent income depresses parental consumption, indicating a precautionary saving motive across generations.

    Original languageEnglish (US)
    Pages (from-to)2735-2765
    Number of pages31
    JournalReview of Economic Studies
    Issue number6
    StatePublished - Nov 1 2021


    • Altruism
    • Consumption
    • D15
    • D64
    • E21
    • Income Risk
    • Precautionary Saving

    ASJC Scopus subject areas

    • Economics and Econometrics


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