Structural Determinants of Household Savings in Turkey: 2003-2008

Arda Aktas (), Duygu Guner (), Seyfettin Gursel () and Gokce Uysal
Additional contact information
Arda Aktas: Stony Brook University
Duygu Guner: University of Mannheim

No 7, Working Papers from Bahcesehir University, Betam

Abstract: Widening current account deficits coupled with low private saving rates in Turkey have started a recent policy debate on how household savings can be increased. Using Household Budget Surveys from 2003 to 2008, we study the structural determinants of household savings in Turkey. We consider various different definitions for savings, including durable consumption goods, education and health. Our findings are robust across different definitions. The results indicate that dependency ratios of households are important determinants of savings. Lower shares of dependent children or dependent elderly in the household imply higher saving rates. Moreover, female labor force participation has significant effects, i.e. households with higher shares of working females, have higher saving rates as well. We also find that households in which the head is self-employed or an employer have higher saving rates. Moreover, households with where pension payments constitute a larger share of income save less. Note that pension payments are always coupled with free health benefits. These findings point to strong evidence of precautionary savings.

Keywords: private savings; Turkey (search for similar items in EconPapers)
JEL-codes: C21 E21 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2010-03, Revised 2010-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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