The Paper reviews the literature on these tax incentives, with special focus on long-term saving, housing, and household liabilities. The Paper addresses several areas of policy intervention: (1) the interest rate effect on personal saving; (2) the effect of tax incentives on long-term mandatory saving programmes; (3) government programmes that target saving for home purchase; (4) government programmes that target health and saving for education; (5) the effect of tax incentives to borrow, rather than to save. For each of these five important issues, the Paper provides empirical evidence on the main characteristics of government programmes, with a special focus on middle-income countries. It also addresses a number of issues that should be of interest to policy-makers. First of all, on which grounds government policy should target some assets rather than others. Second, if tax-sheltered assets and liabilities lead to substitution away from more heavily taxed savings instruments or if they affect the overall level of saving. Finally, if there is any lesson that can be drawn from the experience of developed countries for the design of saving and borrowing incentives in middle-income countries.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
3881.
Find related papers by JEL classification: D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Bernheim, B. Douglas, 2002.
"Taxation and saving,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 18, pages 1173-1249
Elsevier.
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