The Distribution of Household Savings in Germany

Against the ongoing assessment of the root causes of rising economic inequality in industrialized countries, analyses of the distribution of savings along the income and wealth distribution are of high interest. We analyze the concentration of household savings in Germany by estimating saving amounts, saving rates and shares in aggregate savings across income and wealth groups. Our calculations are based on the Sample Survey of Household Income and Expenditure (EVS), containing more than 40,000 households in Germany. We show that the concentration of savings is substantial: while the top income decile’s share in total savings reaches 60 percent, the lower half of the income distribution on average does not save at all. Across wealth groups the concentration of savings is somewhat less pronounced. We also look beyond the top income threshold underlying the EVS (18,000 euros of monthly net household income) and demonstrate that corrected saving rates for the top income groups are considerably higher than those derived from the EVS alone. Hence, the top income groups’ shares in aggregate savings exceed estimated shares solely based on EVS data, revealing a substantially more pronounced concentration of savings along the income distribution.