A Simple Model of Educated Hand-to-Mouth Consumers

• Authors: Adam Pigoń

Title variants

PL

Prosty model gospodarstw domowych typu hand-to-mouth z kapitałem ludzkim

Abstracts

PL

Głównym celem niniejszego opracowania jest analiza wpływu kapitału ludzkiego na występowanie tzw. konsumentów typu hand-to-mouth (tj. konsumentów, którzy nie posiadają płynnych zasobów). Proponowany model oparty jest na modelu z dwoma aktywami, przedstawionym w pracy Kaplan, Violante i Weidner [2014], z dodatkowym rozszerzeniem pozwalającym na endogeniczną akumulację kapitału ludzkiego i opiera się na danych Survey of Consumer Finances (SFC) dla gospodarstw domowych w USA. Pokazano, jak status konsumentów zależy od ich wrodzonych zdolności, preferencji czasowych i początkowych zasobów. Gospodarstwa domowe typu wealthy HtM, tj. gospodarstwa domowe z zasobami niepłynnymi, ale z niewielką płynnością lub zupełnie jej pozbawione, cechują się większymi wrodzonymi zdolnościami, większą cierpliwością i początkowo są one bogatsze niż gospodarstwa domowe typu poor HtM. W konsekwencji akumulują one więcej kapitału ludzkiego niż gospodarstwa domowe typu poor HtM. Dla obu typów gospodarstw domowych ich status zależy od posiadania stromej ścieżki dochodu, która jest endogeniczna z powodu endogenicznej akumulacji kapitału ludzkiego. Korelacja obserwowalnych cech z zachowaniem gospodarstw typu HtM może być interesująca dla polityki gospodarczej: konsumenci ci mają wysoką krańcową skłonność do konsumpcji, więc ukierunkowanie na nie ekspansywnej polityki fiskalnej mogłoby zwiększyć jej efektywność.

EN

The main goal of this paper is to analyse the role of human capital in the incidence of hand-to-mouth (HtM) consumers: those who have no liquid resources. The proposed model is based on a two-asset model by Kaplan, Violante and Weidner [2014] with an extension to allow for endogenous accumulation of human capital and is confronted with empirical data on US households from the Survey of Consumer Finances (SCF). I show how the HtM status of consumers depends on their innate abilities, time preference and initial resources. Wealthy HtM households, i.e. households with illiquid resources but with little or no liquidity, are more able, more patient and initially richer than poor HtM households. As a consequence, they accumulate more human capital than poor HtM households. For both types of households, their status depends on having a steep income path, which is endogenous because of endogenous human capital accumulation. The correlation of observable characteristics with HtM behaviour may be of interest to economic policy makers: these consumers have a high marginal propensity to consume so that targeting them could increase the effectiveness of fiscal policy.

Keywords

PL

kapitał ludzki; konsumpcja; płynność; hand-to-mouth; cykl życia gospodarstwa domowego

EN

human capital; consumption; liquidity; hand-to-mouth; life-cycle

• Publisher: Szkoła Główna Handlowa w Warszawie. Kolegium Analiz Ekonomicznych
• Journal: Gospodarka Narodowa. The Polish Journal of Economics
• Year: 2022
• Volume: 310
• Issue: 2
• Pages: 20-43

Dates

published

2022

Contributors

author

Adam Pigoń

• SGH Warsaw School of Economics, Poland

References

• Aiyagari R. [1994], Uninsured Idiosyncratic Risk and Aggregate Saving, Quarterly Journal of Economics, 109(3): 659–684.
• Attanasio O., Weber G. [2010], Consumption and Saving: Models off Intertemporal Allocation and Their Implications for Public Policy, Journal of Economic Literature, 48(3): 693–751.
• Ben Porath Y. [1967], The Production of Human Capital and the Life Cycle of Earnings, Journal of Political Economy, 75(4): 352–365.
• Bhuller M., Mogstad M., Salvanes K. [2017], Life Cycle Earnings, Education Premiums and Internal Rates of Return, Journal of Labor Economics, 35(4): 993–1030.
• Blanchard O., Dell’Ariccia G., Mauro P. [2010], Rethinking Macroeconomic Policy, IMF Working Paper.
• Blundell R., Pistaferri L., Preston I. [2008], Consumption Inequality and Partial Insurance, American Economic Review, 98(5): 1887– 1921.
• Bovenberg L., Jacobs B. [2005], Redistribution and Education Subsidies are Siamese Twins, Journal of Public Economics, 89(11–12): 2005–2035.
• Brinca P., Holter H., Krusell P., Malafry L. [2015], Fiscal Multipliers in the 21st Century, Journal of Monetary Economics, 77(C): 53–69.
• Brown M., Haughwout A., Lee D., Scally J., van der Klaauw W. [2014], Measuring Student Debt and its Performance, Federal Reserve Bank of New York Staff Reports.
• Browning M., Crossley T. [2001], The Life-Cycle Model of Consumption and Saving, Journal of Economic Perspectives, 15(3): 3–22.
• Campbell J., Mankiw G. [1989], Consumption, Income and Interest Rates: Reinterpreting Time Series Evidence, NBER Macroeconomics Annual.
• Card D. [1999], The Causal Effect of Education on Earnings, Handbook of Labor Economics, Elsevier.
• Carroll C. [1997], Buffer-stock Saving and the Life Cycle/Permanent Income Hypothesis, Quarterly Journal of Economics, 112(1): 1–55.
• Carroll C., Slacalek J., Tokuoka K., White M. [2015], The Distribution of Wealth and the Marginal Propensity to Consume, Quantitative Economics, 8: 977–1020.
• Cronqvist H., Siegel S. [2015], The Origins of Savings Behavior, Journal of Political Economy, 123(1): 123–169.
• Deaton A. [1991], Saving and Liquidity Constraints, Econometrica, 59(5): 1221–1248.
• Feldstein M. [2009], Rethinking the Role of Fiscal Policy, NBER Working Paper 14684.
• Foster K., Schuh S., Zhang H. [2010], The 2010 Survey of Consumer Payment Choice: Summary Results, Federal Reserve Bank of Boston.
• Gali J., Valles J., David Lopez-Salido J. [2007], Understanding the Effects of Government Spending on Consumption, Journal of the European Economic Association, 5(1): 227–270.
• Greene C., Schuh S., Stavins J. [2015], The 2015 Survey of Consumer Payment Choice: Summary Results, Federal Reserve Bank of Boston.
• Haliassos M., Michaelides A. [2003], Portfolio Choice and Liquidity Constraints, International Economic Review, 44(1): 143–177.
• Heathcote J., Storesletten K., Violante G. [2009], Quantitative Macroeconomics with Heterogeneous Households, Working Paper.
• Heathcote J., Storesletten K., Violante G. [2013], Consumption and Labor Supply with Partial Insurance: An Analytical Framework, Working Paper.
• Heer B., Maussner A. [2008], Dynamic General Equilibrium Modelling, Computational Methods and Applications, Springer.
• Huggett M. [1993], The Risk-free rate in Heterogeneous-agent Incomplete-insurance Economies, Journal of Economics Dynamics and Control, 17: 953–969.
• Huggett M. [1996], Wealth Distribution in Life-Cycle Economies, Journal of Monetary Economics, 38(3): 469–494.
• Huggett M., Kaplan G. [2015], How Large is the Stock Component of Human Capital?, Review of Economic Dynamics, 22: 21–51.
• Huggett M., Ventura G., Yaron A. [2006], Human Capital and Earnings Distribution Dynamics, Journal of Monetary Economics, 53(2): 265–290.
• Huggett M., Ventura G., Yaron A. [2011], Sources of Lifetime Inequality, American Economic Review, 101(7): 2923–2954.
• Jappelli T., Pistaferri L. [2010], The Consumption Response to Income Changes, Annual Review of Economics.
• Kaplan G., Moll B., Violante G. [2018], Monetary Policy According to HANK, American Economic Review, 108(3): 697–743.
• Kaplan G., Violante G. [2010], How Much Consumption Insurance Beyond Self-Insurance?, American Economic Journal: Macroeconomics, 2(4): 53–87.
• Kaplan G., Violante G. [2014], A Model of the Consumption Response to Fiscal Stimulus Payments, Econometrica, 82(4): 1199–1239.
• Kaplan G., Violante G., Weidner J. [2014], The Wealthy Hand to Mouth, Brookings Papers.
• King R., Plosser Ch., Rebelo S. [1988], Production, Growth and Business Cycles, Journal of Monetary Economics, 21(2–3): 195–232.
• Krueger D., Fernandez-Villaverde J. [2011], Consumption and Saving over the Life Cycle: How Important Are Consumer Durables?, Macroeconomic Dynamics, 15(5): 725–770.
• Krueger D., Perri F., Pistaferri L., Violante G. [2007], Cross Sectional Facts for Macroeconomics, Working Paper.
• Krusell P., Smith A. [1998], Income and Wealth Heterogeneity in the Macroeconomy, Journal of Political Economy, 106(5): 867–896.
• Oh H., Reis R. [2012], Targeted Transfers and the Fiscal Response to the Great Recession, Journal of Monetary Economics, 15: 50–64.
• Pagel M., Olafsson (Vardardottir) A. [2018], The Liquid Hand-to-Mouth: Evidence from Personal Finance Management Software, Review of Financial Studies, 31(11): 4398–4446.
• Schuh S., Stavins J. [2013], The 2013 Survey of Consumer Payment Choice: Summary Results, Federal Reserve Bank of Boston.
• Stantcheva S. [2017], Optimal Taxation and Human Capital Policies over the Life Cycle, Journal of Political Economy, 125(6): 1931–1990.
• Sydsaeter K., Hammond P., Seierstad A., Strom A. [2008], Further Mathematics in Economic Analysis, Prentice Hall.

Identifiers

DOI

10.33119/GN/144196

Biblioteka Nauki

2054860