Work

Do the Rich Save More? Evidence from C anada

Year: 2014

Type: article

Abstract: This paper provides new evidence on the long‐standing question of whether more affluent households save a larger fraction of their income. The major difficulty in empirically assessing the relationship between incomes and saving rates is to construct a credible proxy for long‐run income—purged of transitory fluctuations and measurement error. The C anadian Family Expenditure Survey provides us with both unusually good data on savings rates and potential predictors with which we can construct reliable long‐run income proxies. Our empirical analysis suggests that the estimated relationship between saving rates and long‐run incomes is sensitive to the predictor used to proxy long‐run income. Nevertheless, our preferred estimates indicate that, except for poorest households (who simply do not save), saving rates do not differ substantially across predicted long‐run income groups.

Source: Review of Income and Wealth

DOI: 10.1111/roiw.12131

Authors: Sule Alan, Kadir Atalay, Thomas F. Crossley

Institutions: University of Essex, The University of Sydney, Institute for Fiscal Studies

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: No poverty, Reduced inequalities

Open Access status: green

Funders: McMaster University, University of Sydney, Social Sciences and Humanities Research Council of Canada, Economic and Social Research Council