Impact of Occupational Unemployment Risk on Household Spending Impact of Occupational Unemployment Risk on Household Spending

By Christopher Cotton, Vaishali Garga, and Justin Rohan

If workers face greater likelihood of unemployment that lowers expected future income, will they save more today? This paper looks at the expenditure response of workers to the change in unemployment risk measured at the occupational level. To examine this response, the authors use two household-level data sets, the Panel Study of Income Dynamics (PSID) and the Consumption Expenditure Survey (CEX). They find that occupational unemployment risk does not have a large impact on consumption expenditure.

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