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Gone with the wind: Demographic transitions and domestic saving

Author

Listed:
  • Eduardo Cavallo
  • Gabriel Sánchez
  • Patricio Valenzuela

Abstract

This study explores the relationship between demographic factors and saving rates using a panel dataset covering 110 countries between 1963 and 2012. In line with predictions from theory, this paper finds that, on average, lower dependency rates and greater longevity are associated with higher domestic saving rates. However, these correlations are statistically robust only in Asia. In particular, Latin America, which is a region that has undergone a remarkably similar “saving friendly” demographic transition since the 1970s, did not experience the same boost in saving rates as Asia. The paper highlights that the potential dividends arising from a favorable demographic transition are not automatically accrued. This is a sobering message at a time when the demographic tide is shifting in the world.

Suggested Citation

  • Eduardo Cavallo & Gabriel Sánchez & Patricio Valenzuela, 2018. "Gone with the wind: Demographic transitions and domestic saving," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1744-1764, November.
    • Handle: RePEc:bla:rdevec:v:22:y:2018:i:4:p:1744-1764
    DOI: 10.1111/rode.12518
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    Cited by:

    1. Marta Pascual-Sáez & David Cantarero-Prieto & María González-Diego, 2018. "Testing the effect of population ageing on national saving rates: panel data evidence from Europe," Working Papers. Collection B: Regional and sectoral economics 1803, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Livacic, Ernesto & Sáez, Sebastián, 2001. "The banking supervision agenda in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Friese, Max, 2017. "The interplay between trade unions and the social security system in an aging economy," Thuenen-Series of Applied Economic Theory 148, University of Rostock, Institute of Economics.
    4. repec:bdr:ensayo:v::y:2005:i:48:p:118-183 is not listed on IDEAS
    5. Boldova Marzo, Daniel Miguel, 2022. "Análisis de la acumulación y distribución de la riqueza [Analysis of capital accumulation and weatlh distribution]," MPRA Paper 113582, University Library of Munich, Germany.
    6. Dong-Hyeon Kim & Peiyao Liu & Shu-Chin Lin, 2024. "The moderating role of financial development in the nexus between population aging and saving," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-32, April.
    7. Constanza Martínez Ventura, 2005. "Una revisión empírica sobre los determinantes del margen de intermediación en Colombia, 1989-2003," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 23(48), pages 118-183.
    8. repec:idb:brikps:7677 is not listed on IDEAS
    9. Jorge M. Uribe, 2023. ""Fiscal crises and climate change"," IREA Working Papers 202303, University of Barcelona, Research Institute of Applied Economics, revised Feb 2023.
    10. David E. Bloom & Michael Kuhn & Klaus Prettner, 2024. "Fertility in High-Income Countries: Trends, Patterns, Determinants, and Consequences," Annual Review of Economics, Annual Reviews, vol. 16(1), pages 159-184, August.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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