This paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income. Time-series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks. The relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income.

Many households in developing countries rely on seasonal agriculture for their incomes. This paper investigates whether household consumption expenditure tracks income across seasons. Using data from Thailand, I contrast the seasonal consumption patterns of households with different seasonal income patterns and estimate the responsiveness of seasonal consumption to seasonal income. I find little evidence that consumption tracks income over the course of the year. The findings suggest that observed seasonal consumption patterns are the result of seasonal variations in preferences or prices, common to all households, rather than an inability of households to use savings behavior to smooth consumption.

Many households in developing countries rely on seasonal agriculture for their incomes. This paper investigates whether household consumption expenditure tracks income across seasons. Using data from Thailand, I contrast the seasonal consumption patterns of households with different seasonal income patterns and estimate the responsiveness of seasonal consumption to seasonal income. I find little evidence that consumption tracks income over the course of the year. The findings suggest that observed seasonal consumption patterns are the result of seasonal variations in preferences or prices, common to all households, rather than an inability of households to use savings behavior to smooth consumption.

This article concerns dual job holding and its link to job mobility. We present evidence from U.S. data on patterns of dual job holding, hours changes, and job mobility. We find that workers move into and out of second jobs frequently, that these movements are associated with large changes in work hours, and that hours constraints may prompt workers to take second jobs. Second, we review theories of dual job holding and present a stochastic dynamic model of dual job holding and job mobility in which decisions to take second jobs and/or change main jobs are made simultaneously.

In a labor market with tied hours-wage packages and wage dispersion for a particular type of job, constrained workers may be willing to sacrifice wage gains for better hours when changing jobs. Likewise, workers may accept jobs offering undesirable hours only if the associated wage gains are large. We investigate this issue empirically by examining whether overemployment and underemployment on the initial and new job affects the relation between hours changes and wage changes for quitters. Our results generally support the view that an individual requires compensation to work in a job that, given the individual's particular preferences, offers unattractive hours.

A wide range of empirical applications rely on linear approximations to dynamic Euler equations. Among the most notable of these is the large and growing literature on precautionary saving that examines how consumption growth and saving behavior are affected by uncertainty and prudence. Linear approximations to Euler equations imply a linear relationship between expected consumption growth and uncertainty in consumption growth, with a slope coefficient that is a function of the coefficient of relative prudence. This literature has produced puzzling results: estimates of the coefficient of relative prudence (and the coefficient of relative risk aversion) from linear regressions of consumption growth on uncertainty in consumption growth imply estimates of prudence and risk aversion that are unrealistically low. Using numerical solutions to a fairly standard intertemporal optimization problem, our results show that the actual relationship between expected consumption growth and uncertainty in consumption growth differs substantially from the relationship implied by a linear approximation. We also present Monte Carlo evidence that shows that the instrumental-variables methods that are commonly used to estimate the parameters correct some, but not all, of the approximation bias.