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Saving behavior along the income distribution during the COVID-19 pandemic

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Abstract

Aggregate data suggest that in several middle- and high-income countries, household savings increased during the first phase of the pandemic. Statistics from countries in Central, Eastern and Southeastern Europe (CESEE) also point in this direction. However, data and research on how this increase in savings is distributed along the income distribution are scarce. We provide evidence for eight CESEE countries, evaluating data from the OeNB Euro Survey wave 2021 on that matter. More precisely, we focus on how saving behavior of individuals differs across income and education groups. We find that, in general, people with higher levels of income and education have higher saving abilities – this is true before and during the pandemic. However, overall, only very few individuals have increased their saving since the start of the pandemic. When asked about saving intentions after the pandemic, particularly individuals from the highest income tercile say that they expect to increase their saving in the future. The combined evidence of aggregate and survey data points to a high degree of saving inequality across the population in all countries.

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  • Elena Ellmeier & Melanie Koch & Thomas Scheiber, 2023. "Saving behavior along the income distribution during the COVID-19 pandemic," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/23, pages 7-21.
    • Handle: RePEc:onb:oenbfi:y:2023:i:q1/23:b:1
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    More about this item

    Keywords

    household saving; inequality; survey data; CESEE;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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