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.
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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)
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