International Journal of Research in Social Sciences
Year : 2016, Volume : 6, Issue : 10
First page : ( 515) Last page : ( 524)
Online ISSN : 2249-2496.

Precautionary savings and social safety net: An empirical study on rural households in Sri Lanka

Gunatilake M.M.

Department of Economics, University of Kelaniya, Sri Lanka

Online published on 19 November, 2016.

Abstract

Economic and social indicators prove that the social safety net in Sri Lanka is strong when compared with those of neighbouring South Asian countries. The economy has been able to provide a commendable social security to its people through a strong and widely covered social safety net since independence. However, some Economists argue that the social safety net may discourage precautionary motive savings of poor households. This paper attempts to make an empirical investigation on the relationship between the social safety and precautionary motive savings of poor households. The present study is based on primary data which were collected through a sample survey. The random sample of poor households comprises of two sub samples as the households that are covered by the Social Safety Net and the households that are not adequately covered by the social safety net. Hypotheses testing was the main analytical tool used to detect any possible relationship between social security and precautionary motive savings of households. The study reveals that there is no significant relationship between the social safety net and precautionary motive savings of households in rural Sri Lanka.

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Keywords

Social security, Precautionary Savings, Households Sri Lanka.

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