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

Stijn Rocher and Michael Stierle ()

No 2015.01, Working Papers from International Network for Economic Research - INFER

Abstract: This paper investigates what can contribute to explaining why household saving rate levels are persistently so dispersed across EU countries, ranging from –10% of household income in Romania to +16% in Germany in 2013. 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.

Keywords: household saving; international comparability; determinants of saving; panel data. (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015
New Economics Papers: this item is included in nep-eec and nep-mac
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Citations: View citations in EconPapers (18)

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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:inf:wpaper:2015.01

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