Just like the poor HtM households, wealthy HtM households have a large marginal propensity to consume out of small transitory income shocks (Kreiner et al. 2012; Broda and Parker, 2014; Jappelli and Pistaferri, 2014). Kaplan et al. (2014) also measure the shares of HtM households (expressed in percentage terms) for seven other developed countries ...nding modest heterogeneity among developed countries: Australia (19), Canada (30), France (21), Germany (32), Italy (24), Spain (20), and United Kingdom (33).

A second group of studies notes that holding assets is not the only means to cope with an unexpected ...nancial shock. For example, individuals can also have access to credit or depend on the help of family and friends, among many other ways and margins to cope with a ...nancial shock. These studies rely on surveys based on self-assessed measures of one’s capacity to deal with ...nancial shocks, regardless of whether the source of funds is the respondent’s own assets, capacity to borrow, a network of family and friends, or something else (e.g., Johnson and Widdows, 1985; Worthington, 2004; Lusardi et al., 2011; Vandone et al., 2011; Brunetti et al., 2016). For example, in an in‡uential paper, Lusardi et al. (2011) conducted a survey for a total of 9,148 individuals between the ages of 18 and 65 in the United States (where 2,148 individuals were surveyed) and other seven developed countries (with about 1,000 respondents per country) between June and September of 2009. Their essential strategy to identify ...nancially fragile households relied on the following question: “How con...dent are you that you could come up with $2,000 if an unexpected need arose within the next month?” The $2,000 ...gure is chosen because it is of the same order of magnitude as the cost of an unanticipated major car repair, a large co-payment on a medical expense, a legal expense, or a home repair. For the survey conducted in the United States, 22 percent of households responded with certainty that they would not be able to come up with the funds and some other 28 percent reported that they would probably not be able to come up with those funds.

# 4.1 Database used

We use individual-level data from the World Bank’s Global Findex which is a comprehensive database on how individuals 15 years old and above save, borrow, make payments, and manage ...nancial risk. The data are collected in partnership with Gallup through nationally-representative surveys of more than 150,000 adults in over 140 economies (i.e., covers about 1,000 individuals per country as in Lusardi et al. 2011). Global Findex has been published every three years since 2011. We use its latest survey for the year 2017 because it allows one to identify all types of social transfers. Previous surveys of 2011 and 2014 did not include public pensions (this is of particular importance for our paper because the empirical evidence shown in Section 2 includes all types of social transfers). The country samples were designed to be nationally representative and were subsequently weighted to re‡ect each country’s population. Given the focus on emerging markets and developed countries, we exclude from our descriptive analysis what the IMF classi...es as “low-income developing countries.” In total, we end up with 99 countries (including those 23 countries of our developed and Latin 16