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IRAs and household saving

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  • Gale, W.G.

    (Tilburg University, Center For Economic Research)

  • Scholtz, J.K.

    (Tilburg University, Center For Economic Research)

Abstract

This paper examines the effects of Individual Retirement Accounts (IRAs) on private and national saving. The authors construct a formal model of dynamic utility maximization that generates closed-form equations for IRA and other saving. Their empirical estimates indicate that raising the annual IRA contribution limit between 1983 and 1986 would have resulted in little, if any, increase in national saving. Results from sensitivity analysis imply substantially smaller effects on national saving than most previous researchers have estimated. The authors' results are consistent with new evidence they present indicating considerable potential among IRA holders to shift taxable forms of saving into IRAs. Copyright 1994 by American Economic Association.
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Suggested Citation

  • Gale, W.G. & Scholtz, J.K., 1992. "IRAs and household saving," Discussion Paper 1992-44, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:f06f2f0d-ac9d-4528-84a3-f4494e5f441b
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    References listed on IDEAS

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    Keywords

    Social Security; National Savings;

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