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Demographic change and private savings in India

Author

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  • Neha Jain

    (Indian Institute of Foreign Trade (IIFT))

  • Srinivas Goli

    (The University of Western Australia (UWA)
    Jawaharlal Nehru University (JNU))

Abstract

India is on the edge of a demographic revolution with a rapidly rising working-age population. For the first time in this study, we investigate the role of the rising working-age population on per capita small savings in post offices and banks net of socio-economic characteristics using state-level panel data compiled from multiple sources for the period 2001–2018. Our comprehensive econometric assessment with multiple robustness checks provides three key findings: (1) per capita private savings is increasing because of India’s growing working-age population; thus, the ‘economic life cycle hypothesis’ is evidentially supported; (2) the demographic factors contribute around one-fourth of the per capita private savings inequality across Indian states; and (3) the demographic window of economic opportunity for India can yield maximum benefits in terms of private savings when accompanied by favourable socio-economic policies on education, health, gender equity, and economic growth.

Suggested Citation

  • Neha Jain & Srinivas Goli, 2022. "Demographic change and private savings in India," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(1), pages 1-29, June.
    • Handle: RePEc:spr:jsecdv:v:24:y:2022:i:1:d:10.1007_s40847-022-00175-3
    DOI: 10.1007/s40847-022-00175-3
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    More about this item

    Keywords

    Demographic change; Working-age population; Population ageing; Private savings; Life cycle hypothesis; Econometric analyses;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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