IDEAS home Printed from
   My bibliography  Save this article

Do wealthier households save more? The impact of the demographic factor


  • Ansgar Belke


  • Christian Dreger


  • Richard Ochmann



This paper investigates the relationship between wealth, ageing and saving behaviour of private households by using pooled cross sections of German consumption survey data. Different components of wealth are distinguished, as their impact on the savings rate is not homogeneous. On average, the effect attributed to real estate dominates the other components of wealth. In addition, the savings rate strongly responds to demographic trends. Besides the direct impact of the age structure, an indirect effect arises through the accumulation of wealth. The savings rate does not decrease with age in a monotonic way, as the permanent income hypothesis suggests. Most prominently, older households tend to increase their savings in the second half of their retirement period, probably due to bequest motives and increasing immobility. Given the ongoing demographic trend, an increase of 1.4 percentage points in the aggregated savings rate should be expected over the next two decades. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Ansgar Belke & Christian Dreger & Richard Ochmann, 2015. "Do wealthier households save more? The impact of the demographic factor," International Economics and Economic Policy, Springer, vol. 12(2), pages 163-173, June.
  • Handle: RePEc:kap:iecepo:v:12:y:2015:i:2:p:163-173 DOI: 10.1007/s10368-014-0275-x

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    1. Christian Dreger & Hans-Eggert Reimers, 2012. "The long run relationship between private consumption and wealth: common and idiosyncratic effects," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 11(1), pages 21-34, April.
    2. Carroll, Christopher D., 2009. "Precautionary saving and the marginal propensity to consume out of permanent income," Journal of Monetary Economics, Elsevier, vol. 56(6), pages 780-790, September.
    3. James M. Poterba, 2004. "Impact of population aging on financial markets in developed countries," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 43-53.
    4. Belke, Ansgar & Dreger, Christian, 2011. "Current account imbalances in the euro area: Catching up or competitiveness?," Discussion Papers 297, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    5. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
    6. Higgins, Matthew, 1998. "Demography, National Savings, and International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 343-369, May.
    7. Garner, Thesia I. & Short, Kathleen, 2009. "Accounting for owner-occupied dwelling services: Aggregates and distributions," Journal of Housing Economics, Elsevier, vol. 18(3), pages 233-248, September.
    8. Andrew Ang & Angela Maddaloni, 2005. "Do Demographic Changes Affect Risk Premiums? Evidence from International Data," The Journal of Business, University of Chicago Press, vol. 78(1), pages 341-380, January.
    9. Angus Deaton & Christina Paxson, 1997. "The effects of economic and population growth on national saving and inequality," Demography, Springer;Population Association of America (PAA), vol. 34(1), pages 97-114, February.
    10. Axel Börsch-Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi-Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    11. Andrew B. Abel, 2003. "The Effects of a Baby Boom on Stock Prices and Capital Accumulation in the Presence of Social Security," Econometrica, Econometric Society, vol. 71(2), pages 551-578, March.
    12. James M. Poterba, 2004. "The impact of population aging on financial markets," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 163-216.
    13. Pierre-Olivier Gourinchas & Jonathan A. Parker, 2002. "Consumption Over the Life Cycle," Econometrica, Econometric Society, vol. 70(1), pages 47-89, January.
    14. Mariacristina De Nardi & Eric French & John B. Jones, 2010. "Why Do the Elderly Save? The Role of Medical Expenses," Journal of Political Economy, University of Chicago Press, vol. 118(1), pages 39-75, February.
    15. Christopher D. Carroll & Misuzu Otsuka & Jirka Slacalek, 2006. "How Large Is the Housing Wealth Effect? A New Approach," NBER Working Papers 12746, National Bureau of Economic Research, Inc.
    16. Ansgar Belke & Christian Dreger, 2013. "Current Account Imbalances in the Euro Area: Does Catching up Explain the Development?," Review of International Economics, Wiley Blackwell, vol. 21(1), pages 6-17, February.
    17. Author-Name: John Geanakoplos & Michael Magill & Martine Quinzii, 2004. "Demography and the Long-Run Predictability of the Stock Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 241-326.
    18. Feroli, Michael, 2006. "Demography and the U.S. current account deficit," The North American Journal of Economics and Finance, Elsevier, vol. 17(1), pages 1-16, March.
    19. Jonathan Skinner & Stephen P. Zeldes, 2002. "The Importance of Bequests and Life-Cycle Saving in Capital Accumulation: A New Answer," American Economic Review, American Economic Association, vol. 92(2), pages 274-278, May.
    20. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    21. Bloom, David E. & Canning, David & Mansfield, Richard K. & Moore, Michael, 2007. "Demographic change, social security systems, and savings," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 92-114, January.
    22. Fehr, Hans & Kallweit, Manuel & Kindermann, Fabian, 2012. "Pension reform with variable retirement age: a simulation analysis for Germany," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(03), pages 389-417, July.
    23. David Demery & Nigel Duck, 2006. "Demographic change and the UK savings rate," Applied Economics, Taylor & Francis Journals, vol. 38(2), pages 119-136.
    24. Martin Beznoska & Richard Ochmann, 2013. "The interest elasticity of household savings: a structural approach with German micro data," Empirical Economics, Springer, vol. 45(1), pages 371-399, August.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Christian Dreger, 2017. "Long-term growth perspectives in Japan and the Euro area," Asia Europe Journal, Springer, vol. 15(4), pages 363-375, December.
    2. Belke, Ansgar, 2013. "Impact of a Low Interest Rate Environment - Global Liquidity Spillovers and the Search-for-yield," Ruhr Economic Papers 429, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. repec:spr:eurasi:v:4:y:2014:i:1:p:3-30 is not listed on IDEAS
    4. repec:spr:pharme:v:4:y:2014:i:1:p:3-30 is not listed on IDEAS
    5. Alfredo Schclarek & Mauricio Caggia, 2015. "Household Saving and Labor Informality: The Case of Chile," IDB Publications (Working Papers) 6946, Inter-American Development Bank.
    6. repec:pab:rmcpee:v:24:y:2018:i:1:p:292-339 is not listed on IDEAS
    7. Bussolo,Maurizio & Simone,Schotte & Matytsin,Mikhail, 2015. "Population aging and households? saving in the Russian Federation," Policy Research Working Paper Series 7443, The World Bank.
    8. Ansgar Belke, 2013. "Impact of a Low Interest Rate Environment - Global Liquidity Spillovers and the Search-for-yield," Ruhr Economic Papers 0429, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    9. Alfredo Schclarek & Mauricio Caggia, 2015. "Household Saving and Labor Informality: The Case of Chile," IDB Publications (Working Papers) 89359, Inter-American Development Bank.
    10. repec:zbw:rwirep:0429 is not listed on IDEAS
    11. Zaharia Marian & Babucea Ana-Gabriela & Bălăcescu Aniela, 2015. "Dynamics And Their Determinants In Household Deposits In Lei. Case Of Romania After The Financial Crisis Of 2008," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 237-240, December.

    More about this item


    Savings; Wealth; Demographic change; E21; G11;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:iecepo:v:12:y:2015:i:2:p:163-173. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.