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PSC newsletter spring 2014 issue now available

Kusunoki wins faculty seed grant award from Institute for Research on Women and Gender

2014 PAA Annual Meeting, May 1-3, Boston

USN&WR ranks Michigan among best in nation for graduate education in sociology, public health, economics

Next Brown Bag

Monday, April 21
Grant Miller: Managerial Incentives in Public Service Delivery

The Decline in Household Saving and the Wealth Effect

Publication Abstract

Juster, F.T., J.P. Lupton, J.P. Smith, and Frank P. Stafford. 2006. "The Decline in Household Saving and the Wealth Effect." Review of Economics and Statistics, 88(1): 20-27.

Using a unique set of household-level panel data, we estimate the effect of capital gains on saving by asset type, controlling for observable and unobservable household-specific fixed effects. The results suggest that the decline in the personal saving rate since 1984 is largely due to the significant capital gains in corporate equities experienced over this period. Over 5-year periods, the effect of capital gains in corporate equities on saving is substantially larger than the effect of capital gains in housing or other assets. Failure to differentiate wealth effects across asset types results in a significant understatement of their size.

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