Abstract
The aim of this paper is to develop and test hypotheses designed to explain international differences in saving behaviour. These hypotheses are derived from the life cycle hypothesis, which suggests that such differences may be explained by differences in the rate of growth of per capita income, length of retirement, demographic factors and the availability of social security retirement pensions. Attention is focused on the role played by social security. The life cycle hypothesis explains much of the international variation in saving behaviour, and although one can identify both savings replacement and induced retirement effects for social security they appear almost to offset each other.
The authors are Institute Professor and graduate student respectively, at the Massachusetts Institute of Technology. They would like to thank Stanley Fischer, Wolfgang Franz and Larry Summers for helpful comments.
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Modigliani, F., Sterling, A. (1983). Determinants of Private Saving with Special Reference to the Role of Social Security—Cross-country Tests. In: Modigliani, F., Hemming, R. (eds) The Determinants of National Saving and Wealth. International Economic Association Publications. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17028-9_2
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DOI: https://doi.org/10.1007/978-1-349-17028-9_2
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