Demographic Determinants of Savings: Estimating and Interpreting the Aggregate Association in Asia
AbstractLife cycle savings is proposed as one explanation for much of the increase in savings and economic growth in Asia. The association between the age composition of a nation's population and its savings rate, observed within 16 Asian countries from 1952 to 1992, is re-estimated here to be less than a quarter the size reported in a seminal study, which assumed lagged savings is exogenous. Specification tests as well as common sense imply, moreover, that lagged savings is likely to be endogenous, and when estimated accordingly there remains no significant dependence of savings on the age composition, measured in several ways. Research should consider lifetime savings as a substitute for children, and model the causes for the decline in fertility which changes the age compositions and could thereby account for savings and growth in Asia.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economic Growth Center, Yale University in its series Working Papers with number 901.
Length: 36 pages
Date of creation: Dec 2004
Date of revision:
Life Cycle Savings; Aging; Asian Growth; Demographic Transition;
Other versions of this item:
- Schultz, T. Paul, 2005. "Demographic Determinants of Savings: Estimating and Interpreting the Aggregate Association in Asia," IZA Discussion Papers 1479, Institute for the Study of Labor (IZA).
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-29 (All new papers)
- NEP-DEV-2005-05-29 (Development)
- NEP-SEA-2005-05-29 (South East Asia)
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.:
- Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
- Ray C. Fair & Kathryn M. Dominguez, 1992.
"Effects of the Changing U.S. Age Distribution on Macroeconomic Equations,"
NBER Working Papers
2280, National Bureau of Economic Research, Inc.
- Fair, Ray C & Dominguez, Kathryn M, 1991. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," American Economic Review, American Economic Association, vol. 81(5), pages 1276-94, December.
- Ray C. Fair & Kathryn M. Dominguez, 1987. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," Cowles Foundation Discussion Papers 839, Cowles Foundation for Research in Economics, Yale University.
- Leff, Nathaniel H, 1969. "Dependency Rates and Savings Rates," American Economic Review, American Economic Association, vol. 59(5), pages 886-96, December.
- J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
- B. Douglas Bernheim & John B. Shoven, 1991. "National Saving and Economic Performance," NBER Books, National Bureau of Economic Research, Inc, number bern91-2.
- Rosenzweig, Mark R. & Paul Schultz, T., 1987.
"Fertility and investments in human capital : Estimates of the consequence of imperfect fertility control in Malaysia,"
Journal of Econometrics,
Elsevier, vol. 36(1-2), pages 163-184.
- Rosenzweig, Mark R. & Schultz, T. Paul, 1987. "Fertility and Investments in Human Capital: Estimates of the Consequences of Imperfect Fertility Control in Malaysia," Bulletins 7513, University of Minnesota, Economic Development Center.
- Robert M. Schmidt & Allen C. Kelley, 1996. "Saving, dependency and development," Journal of Population Economics, Springer, vol. 9(4), pages 365-386.
- Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, vol. 13(05), pages 747-754, October.
- J. Bradford De Long & Lawrence H. Summers, .
"Equipment Investment and Economic Growth,"
J. Bradford De Long's Working Papers
_122, University of California at Berkeley, Economics Department.
- Angus Deaton, 2003.
"Measuring Poverty in a Growing World (or Measuring Growth in a Poor World),"
NBER Working Papers
9822, National Bureau of Economic Research, Inc.
- Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
- Angus Deaton, 2004. "Measuring poverty in a growing world (or measuring growth in a poor world)," Working Papers 178, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Christina Paxson, 1995.
"Saving and Growth: Evidence from Micro Data,"
NBER Working Papers
5301, National Bureau of Economic Research, Inc.
- Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467.
- Martin Browning & Annamaria Lusardi, 1995.
"Household Saving: Micro Theories and Micro Facts,"
Department of Economics Working Papers
1995-02, McMaster University.
- Matthew Higgins & Jeffrey G. Williamson, 1996. "Asian Demography and Foreign Capital Dependence," NBER Working Papers 5560, National Bureau of Economic Research, Inc.
- Lee, Ronald D & Lapkoff, Shelley, 1988. "Intergenerational Flows of Time and Goods: Consequences of Slowing Population Growth," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 618-51, June.
- Nerlove, Marc, 1971.
"Further Evidence on the Estimation of Dynamic Economic Relations from a Time Series of Cross Sections,"
Econometric Society, vol. 39(2), pages 359-82, March.
- Marc Nerlove, 1968. "Further Evidence on the Estimation of Dynamic Economic Relations from a Time Series of Cross-Sections," Cowles Foundation Discussion Papers 257, Cowles Foundation for Research in Economics, Yale University.
- Hammer, Jeffrey S., 1986. "Children and savings in less developed countries," Journal of Development Economics, Elsevier, vol. 23(1), pages 107-118, September.
- Choudhry, Misbah T. & Elhorst, J. Paul, 2010. "Demographic transition and economic growth in China, India and Pakistan," Economic Systems, Elsevier, vol. 34(3), pages 218-236, September.
- Ravallion, Martin, 2005. "On the contribution of demographic change to aggregate poverty measures for the developing world," Policy Research Working Paper Series 3580, The World Bank.
- Barry Bosworth & Gabriel Chodorow-Reich, 2007. "Saving and Demographic Change: The Global Dimension," Working Papers, Center for Retirement Research at Boston College wp2007-02, Center for Retirement Research, revised Feb 2007.
- Matthew J. Baker & Lisa M. George, 2009.
"The Role of Television in Household Debt: Evidence from the 1950's,"
Hunter College Department of Economics Working Papers
427, Hunter College: Department of Economics.
- Baker Matthew J. & George Lisa M, 2010. "The Role of Television in Household Debt: Evidence from the 1950's," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, May.
- Arlette Campbell White & Thomas W. Merrick & Abdo S. Yazbeck, 2006. "Reproductive Health—The Missing Millennium Development Goal : Poverty, Health, and Development in a Changing World," World Bank Publications, The World Bank, number 7116, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Danishevsky).
If references are entirely missing, you can add them using this form.