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Do Wealthier Households Save More? The Impact of the Demographic Factor

Author

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  • Belke, Ansgar H.

    (University of Duisburg-Essen)

  • Dreger, Christian

    (DIW Berlin)

  • Ochmann, Richard

    (DIW Berlin)

Abstract

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.

Suggested Citation

  • Belke, Ansgar H. & Dreger, Christian & Ochmann, Richard, 2012. "Do Wealthier Households Save More? The Impact of the Demographic Factor," IZA Discussion Papers 6567, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6567
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    Citations

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    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. Bussolo, Maurizio & Schotte, Simone & Matytsin, Mikhail, 2017. "Accounting for the bias against the life-cycle hypothesis in survey data: An example for Russia," The Journal of the Economics of Ageing, Elsevier, vol. 9(C), pages 185-207.
    4. Edyta Marcinkiewicz, 2018. "Does the retirement saving motive foster higher savings? The evidence from the Polish household survey," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(1), pages 85-96, January.
    5. Aviad Tur-Sinai & Noah Lewin-Epstein, 2020. "Transitions in Giving and Receiving Intergenerational Financial Support in Middle and Old Age," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(3), pages 765-791, August.
    6. Alfredo Schclarek & Mauricio Caggia, 2017. "Household saving and labor informality: the case of Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 20(3), pages 052-080, December.
    7. Teresa H. Bednarczyk & Ilona Skibińska-Fabrowska & Anna Szymańska, 2021. "An Empirical Study on the Financial Preparation for Retirement of the Independent Workers for Profit in Poland," Risks, MDPI, vol. 9(9), pages 1-21, September.
    8. De Andrés Mosquera, Andrés, 2017. "Los determinantes a largo plazo y su contribución a la tasa de ahorro de los hogares españoles en el período 1985-2016 || Long-term determinants and its contribution to Spanish household saving rate d," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 24(1), pages 292-339, Diciembre.
    9. 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.
    10. 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.
    11. Alfredo Schclarek & Mauricio Caggia, 2015. "Household Saving and Labor Informality: The Case of Chile," IDB Publications (Working Papers) 89359, Inter-American Development Bank.
    12. Stefan Ederer & Josef Baumgartner & Jürgen Bierbaumer & Serguei Kaniovski & Silvia Rocha-Akis & Gerhard Streicher, 2016. "Österreich 2025 – Privater Konsum und öffentliche Investitionen in Österreich," WIFO Studies, WIFO, number 59037, June.
    13. repec:zbw:rwirep:0429 is not listed on IDEAS
    14. 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.
    15. Andrea Bassanini & Thomas Manfredi, 2014. "Capital’s grabbing hand? A cross-industry analysis of the decline of the labor share in OECD countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 3-30, June.

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    More about this item

    Keywords

    demographic change; wealth; savings;
    All these keywords.

    JEL classification:

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

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