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Testing the effect of population ageing on national saving rates: panel data evidence from Europe

Author

Listed:
  • Marta Pascual-Sáez
  • David Cantarero-Prieto
  • María González-Diego

Abstract

The objective of this study is to test the relationships between population ageing and gross saving rates in European countries. We use panel data techniques to explore the possible non-linearity between it. We show that the dependency ratio, when is significant, negatively affects gross saving rates. Besides, life expectancy has non-linear effects on saving rates and rising longevity is a main factor to explain saving rates at national levels. European countries are concerned about the delivery of benefits and services and financial sustainability of their welfare state and increase gross national savings rates can help to fill this gap.

Suggested Citation

  • 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.
  • Handle: RePEc:gov:wpregi:1803
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    File URL: http://infogen.webs.uvigo.es/WPB/WP1803.pdf
    File Function: First version, 2018
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    References listed on IDEAS

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    1. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    2. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-1059, October.
    3. David E. Bloom & David Canning & Bryan Graham, 2003. "Longevity and Life-cycle Savings," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 319-338, September.
    4. Mariacristina De Nardi & Eric French & John Bailey Jones, 2009. "Life Expectancy and Old Age Savings," American Economic Review, American Economic Association, vol. 99(2), pages 110-115, May.
    5. repec:taf:irapec:v:31:y:2017:i:6:p:811-831 is not listed on IDEAS
    6. Kinugasa, Tomoko & Mason, Andrew, 2007. "Why Countries Become Wealthy: The Effects of Adult Longevity on Saving," World Development, Elsevier, vol. 35(1), pages 1-23, January.
    7. Christoph Metzger, 2017. "Who is saving privately for retirement and how much? New evidence for Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(6), pages 811-831, November.
    8. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    9. Leff, Nathaniel H, 1969. "Dependency Rates and Savings Rates," American Economic Review, American Economic Association, vol. 59(5), pages 886-896, December.
    10. Gupta, Kanhaya L, 1971. "Dependency Rates and Savings Rates: Comment," American Economic Review, American Economic Association, vol. 61(3), pages 469-471, June.
    11. Ravn, Morten O. & Sterk, Vincent, 2017. "Job uncertainty and deep recessions," Journal of Monetary Economics, Elsevier, vol. 90(C), pages 125-141.
    12. Benjamin Wong & Kam Ki Tang, 2013. "Do ageing economies save less? Evidence from OECD data," International Journal of Social Economics, Emerald Group Publishing, vol. 40(6), pages 591-605, May.
    13. Benjamin Wong & Kam Ki Tang, 2013. "Do ageing economies save less? Evidence from OECD data," International Journal of Social Economics, Emerald Group Publishing, vol. 40(6), pages 591-605, May.
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    More about this item

    Keywords

    population ageing; gross saving rates; old-age dependency ratio; life expectancy; longevity; European countries.;

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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