Household saving rates in the EU: Why do they differ so much?

Michael Stierle () and Stijn Rocher

No 5, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper investigates factors which may help explain the persistent differences in household saving rate across the EU, which in 2013 ranged from –10% of household income in Romania to +16% in Germany. Factors explaining changes over time or forecasting of household savings fall out of the scope of this paper. First, we argue that caution is needed when comparing household saving rates across countries. Institutional differences and data reliability are likely to hinder the international comparability of saving rates. Second, we discuss various determinants of household saving behaviour. We find that traditional explanatory variables like income levels, age dependency and uncertainty can explain more than half of the cross section variance in saving rates. However, large unobserved country fixed effects (e.g. because of institutional differences and measurement error) appear to be present.

JEL-codes: C23 E21 H55 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2015-09
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Household saving rates in the EU: Why do they differ so much? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:005

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