Norges Bank

Working Paper

The Saving and Employment Effects of Higher Job Loss Risk

Author:
Ragnar E. Juelsrud and Ella Getz Wold
Series:
Working Paper
Number:
17/2019

In this paper we use Norwegian tax data and a novel natural experiment to isolate the impact of job loss risk on saving behavior. We find that a one percentage point increase in job loss risk increases liquid savings by roughly 1.2 - 2.0 percent. Further, we show that employment falls in non-tradable industries not directly affected by the shock, also after controlling for intersectoral linkages and lower demand from affected industries, consistent with the household demand channel of recessions.

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ISSN 1502-8190 (online)

Published 3 October 2019 16:02
Published 3 October 2019 16:02