A Cohort Analysis of Saving Behavior by U.S. Households
AbstractIn this paper I analyze the pattern of saving behavior by U.S. households, using the Consumer Expenditure (CEX) Survey. The analysis' main goal is to explain the decline in aggregate personal saving in the United States in the 1980s. I estimate a typical' saving-age profile and identify systematic movements of the profile across different cohorts of U.S. households. In addition, I consider different definitions of saving and control for a number of factors that figure in popular explanations fo the decline in saving. The main results can be summarized as follows: 1) the typical' saving-age profile presents a pronounced hump' and peaks around age 60; 2) this typical' age profile was, at least during the 1980s, shifted down for those cohorts born between 1925 and 1939. This is consistent with the low level of aggregate saving because these cohort were, in the 1980s, in that part of their life cycle when saving is highest; 3) this results holds for various definition of saving with one notable exception; the decline is less pronounced when expenditure on durables is considered as saving; and 4) some other popular explanations of the decline in saving are rejected by the data, including those appealing to the presence of capital gains on real or financial assets.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4454.
Date of creation: Sep 1993
Date of revision:
Publication status: published as Journal of Human Resources, Vol. 33, no. 3 (Summer 1998): 575-609.
Note: EFG PE
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Other versions of this item:
- Orazio P. Attanasio, 1998. "Cohort Analysis of Saving Behavior by U.S. Households," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 575-609.
- Orazio Attanasio, 1993. "A cohort analysis of saving behaviour by US households," IFS Working Papers, Institute for Fiscal Studies W93/04, Institute for Fiscal Studies.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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