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

Author

Listed:
  • 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 for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp6567
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    References listed on IDEAS

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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. repec:pdc:jrnbeh:v:14:y:2018:i:1:p:85-96 is not listed on IDEAS
    4. repec:chb:bcchec:v:20:y:2017:i:3:p:052-080 is not listed on IDEAS
    5. repec:spr:eurasi:v:4:y:2014:i:1:p:3-30 is not listed on IDEAS
    6. repec:spr:pharme:v:4:y:2014:i:1:p:3-30 is not listed on IDEAS
    7. Alfredo Schclarek & Mauricio Caggia, 2015. "Household Saving and Labor Informality: The Case of Chile," IDB Publications (Working Papers) 6946, Inter-American Development Bank.
    8. repec:pab:rmcpee:v:24:y:2018:i:1:p:292-339 is not listed on IDEAS
    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. repec:wfo:wstudy:59037 is not listed on IDEAS
    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. repec:spr:eurasi:v:4:y:2014:i:1:d:10.1007_s40821-014-0004-y is not listed on IDEAS

    More about this item

    Keywords

    demographic change; wealth; savings;

    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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