Download or read book Understanding Why High Income Households Save More Than Low Income Households written by Mark Huggett and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use a calibrated life-cycle model to evaluate why high income households save as a group a much higher fraction of income than do low income households in US cross-section data. We find that (1) age and relatively permanent earnings differences across households together with the structure of the US social security system are sufficient to replicate this fact, (2) without social security the model economies still produce large differences in saving rates across income groups and (3) purely temporary earnings shocks of the magnitude estimated in US data alter only slightly the saving rates of high and low income households. Keyword(s): Saving; Distribution; Life cycle.
Download or read book Understanding why High Income Households Save More Than Low Income Households written by Mark Huggett and published by . This book was released on 1997 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Towards Understanding Savings Behavior Among Low income Households in the United States written by Matthew A. Scogin and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book International Comparisons of Household Saving written by James M. Poterba and published by University of Chicago Press. This book was released on 2007-12-01 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: Governments and corporations may chip in, but around the world houshold saving is the biggest factor in national saving. To better understand why saving rates differ across countries, this volume provides the most up-to-date analyses of patterns of household saving behavior in Canada, Italy, Japan, Germany, the United Kingdom, and the United States. Each of the six chapters examines micro data sets of household saving within a particular country and summarizes statistics on patterns of saving by age, income, and other demographic factors. The authors provide age-earning profiles and analyses of the accumulation of wealth over the lifetime in a clear way that allows quick comparisons between earning, consumption, and saving in the six countries. Designed as a companion to Public Policies and Household Saving (1994), which addresses saving policies in the G-7 nations, this volume offers detailed descriptions of saving behavior in all G-7 nations except France.
Download or read book Income Polarization in the United States written by Ali Alichi and published by International Monetary Fund. This book was released on 2016-06-28 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper uses a combination of micro-level datasets to document the rise of income polarization—what some have referred to as the “hollowing out” of the income distribution—in the United States, since the 1970s. While in the initial decades more middle-income households moved up, rather than down, the income ladder, since the turn of the current century, most of polarization has been towards lower incomes. This result is striking and in contrast with findings of other recent contributions. In addition, the paper finds evidence that, after conditioning on income and household characteristics, the marginal propensity to consume from permanent changes in income has somewhat fallen in recent years. We assess the potential impacts of these trends on private consumption. During 1998-2013, the rise in income polarization and lower marginal propensity to consume have suppressed the level of real consumption at the aggregate level, by about 31⁄2 percent—equivalent to more than one year of consumption.
Download or read book The Financial Diaries written by Jonathan Morduch and published by Princeton University Press. This book was released on 2017-04-04 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: Drawing on the groundbreaking U.S. Financial Diaries project (http://www.usfinancialdiaries.org/), which follows the lives of 235 low- and middle-income families as they navigate through a year, the authors challenge popular assumptions about how Americans earn, spend, borrow, and save-- and they identify the true causes of distress and inequality for many working Americans.
Download or read book Do the Rich Save More written by Karen E. Dynan and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The question of whether higher-lifetime income households save a larger fraction of their income was the subject of much debate in the 1950s and 1960s, and while the answer was not resolved, it remains central to the evaluation of tax and macroeconomic policies. We resolve this long-standing question using new empirical methods applied to the Panel Study on Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We find a strong positive relationship between saving rates and lifetime income and a weaker but still positive relationship between the marginal propensity to save and lifetime income. There is little support for theories that seek to explain these positive correlations by relying solely on time preference rates, nonhomothetic preferences, or variations in Social Security benefits. There is more support for models emphasizing uncertainty with respect to income and health expenses, bequest motives, and asset-based means testing or behavioral factors causing minimal saving rates among low-income households.
Download or read book Aging and the Macroeconomy written by National Research Council and published by National Academies Press. This book was released on 2013-01-10 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: The United States is in the midst of a major demographic shift. In the coming decades, people aged 65 and over will make up an increasingly large percentage of the population: The ratio of people aged 65+ to people aged 20-64 will rise by 80%. This shift is happening for two reasons: people are living longer, and many couples are choosing to have fewer children and to have those children somewhat later in life. The resulting demographic shift will present the nation with economic challenges, both to absorb the costs and to leverage the benefits of an aging population. Aging and the Macroeconomy: Long-Term Implications of an Older Population presents the fundamental factors driving the aging of the U.S. population, as well as its societal implications and likely long-term macroeconomic effects in a global context. The report finds that, while population aging does not pose an insurmountable challenge to the nation, it is imperative that sensible policies are implemented soon to allow companies and households to respond. It offers four practical approaches for preparing resources to support the future consumption of households and for adapting to the new economic landscape.
Download or read book Preparing for an Aging World written by National Research Council and published by National Academies Press. This book was released on 2001-06-26 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: Aging is a process that encompasses virtually all aspects of life. Because the speed of population aging is accelerating, and because the data needed to study the aging process are complex and expensive to obtain, it is imperative that countries coordinate their research efforts to reap the most benefits from this important information. Preparing for an Aging World looks at the behavioral and socioeconomic aspects of aging, and focuses on work, retirement, and pensions; wealth and savings behavior; health and disability; intergenerational transfers; and concepts of well-being. It makes recommendations for a collection of new, cross-national data on aging populationsâ€"data that will allow nations to develop policies and programs for addressing the major shifts in population age structure now occurring. These efforts, if made internationally, would advance our understanding of the aging process around the world.
Download or read book Individual and Institutional Factors Related to Low Income Household Saving Behavior written by Stuart Heckman and published by . This book was released on 2017 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research sought to further understanding of factors related to low-income household saving behavior. Saving behavior, defined as whether a household spent less than income, was analyzed by applying institutional theory, which proposes that households' institutional environment has a substantial effect on financial decisions. Two logistic regression models were used to test the effects of variables on saving behavior; the first logit was based on the life cycle hypothesis and the second added noneconomic individual factors (i.e., social networks, financial literacy, and psychological variables) and institutional factors (i.e., access, incentives, and facilitation). Institutional factors, including the number of institutions used, credit access, and having an employer sponsored retirement plan, had significant effects even after controlling for the effect of variables based on the life cycle model, suggesting that promoting institutional access and facilitation - especially through employer-provided plans - may encourage saving behavior among low-income households.
Download or read book Do the Rich Save More written by Karen E. Dynan and published by . This book was released on 2000 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: The issue of whether higher lifetime income households save a larger fraction of their income is an important factor in the evaluation of tax and macroeconomic policy. Despite an outpouring of research on this topic in the 1950s and 1960s, the question remains unresolved and has since received little attention. This paper revisits the issue, using new empirical methods and the Panel Study on Income Dynamics, the Survey of Consumer Finances, and the Consumer Expenditure Survey. We first consider the various ways in which life cycle models can be altered to generate differences in saving rates by income groups: differences in Social Security benefits, different time preference rates, non-homothetic preferences, bequest motives, uncertainty, and consumption floors. Using a variety of instruments for lifetime income, we find a strong positive relationship between personal saving rates and lifetime income. The data do not support theories relying on time preference rates, non-homothetic preferences, or variations in Social Security benefits. Instead, the evidence is consistent with models in which precautionary saving and bequest motives drive variations in saving rates across income groups. Finally, we illustrate how models that assume a constant rate of saving across income groups can yield erroneous predictions
Download or read book Unequal Chances written by Samuel Bowles and published by Princeton University Press. This book was released on 2009-10-15 with total page 315 pages. Available in PDF, EPUB and Kindle. Book excerpt: Is the United States "the land of equal opportunity" or is the playing field tilted in favor of those whose parents are wealthy, well educated, and white? If family background is important in getting ahead, why? And if the processes that transmit economic status from parent to child are unfair, could public policy address the problem? Unequal Chances provides new answers to these questions by leading economists, sociologists, biologists, behavioral geneticists, and philosophers. New estimates show that intergenerational inequality in the United States is far greater than was previously thought. Moreover, while the inheritance of wealth and the better schooling typically enjoyed by the children of the well-to-do contribute to this process, these two standard explanations fail to explain the extent of intergenerational status transmission. The genetic inheritance of IQ is even less important. Instead, parent-offspring similarities in personality and behavior may play an important role. Race contributes to the process, and the intergenerational mobility patterns of African Americans and European Americans differ substantially. Following the editors' introduction are chapters by Greg Duncan, Ariel Kalil, Susan E. Mayer, Robin Tepper, and Monique R. Payne; Bhashkar Mazumder; David J. Harding, Christopher Jencks, Leonard M. Lopoo, and Susan E. Mayer; Anders Björklund, Markus Jäntti, and Gary Solon; Tom Hertz; John C. Loehlin; Melissa Osborne Groves; Marcus W. Feldman, Shuzhuo Li, Nan Li, Shripad Tuljapurkar, and Xiaoyi Jin; and Adam Swift.
Download or read book Saving and Growth written by Chris Carroll and published by . This book was released on 1993 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the relationship between income growth and saving using both cross-country and household data. At the aggregate level, we find that growth Granger causes saving, but that saving does not Granger cause growth. Using household data, we find that households with predictably higher income growth save more than households with predictably low growth. We argue that standard Permanent Income models of consumption cannot explain these findings, but that a model of consumption with habit formation may. The positive effect of growth on saving implies that previous estimates of the effect of saving on growth may be overstated.
Download or read book Communities in Action written by National Academies of Sciences, Engineering, and Medicine and published by National Academies Press. This book was released on 2017-04-27 with total page 583 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.
Download or read book Frugality written by Mr.Yasser Abdih and published by International Monetary Fund. This book was released on 2009-09-01 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: Household savings rates in the United States have recently crept up from all-time lows. Some have suggested that a shift toward frugality will hamper GDP growth-the Keynesian "paradox of thrift." We estimate that households compensate for a fall in their asset income by saving more out of their labor income, dollar-for-dollar. In the wake of the crisis, our model predicts that such primary savings will increase, but only temporarily and modestly, as household assets stabilize. As savings flows gradually accumulate, they help rebuild corporate net worth and hence firms' capacity to make capital investments. A timely return to pre-crisis levels of capital investment would require that U.S. households save substantially more than the model predicts, starting now. Hence, we should fret that our savings rates may be too low.
Download or read book What Explains the Decline in R written by Atif Mian and published by . This book was released on 2021 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Downward pressure on the natural rate of interest (r∗) is often attributed to an increase in saving. This study uses microeconomic data from the SCF+ to explore the relative importance of demographic shifts versus rising income inequality on the evolution of saving behavior in the United States from 1950 to 2019. The evidence suggests that rising income inequality is the more important factor explaining the decline in r∗. Saving rates are significantly higher for high income households within a given birth cohort relative to middle and low income households in the same birth cohort, and there has been a large rise in income shares for high income households since the 1980s. The result has been a large rise in saving by high income earners since the 1980s, which is the exact same time period during which r* has fallen. Differences in saving rates across the working age distribution are smaller, and there has not been a consistent monotonic shift in income toward any given age group. Both findings challenge the view that demographic shifts due to the aging of the baby boom generation explain the decline in r∗."--Abstract.
Download or read book Causes and Consequences of Income Inequality written by Ms.Era Dabla-Norris and published by International Monetary Fund. This book was released on 2015-06-15 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
