Life-Cycle Savings and Public Policy

CHAPTER 3

Household Saving in Germany

Axel Bo

¨

rsch-Supan

Mannheim Research Institute for the Economics of Aging (MEA) and

Sonderforschungsbereich 504, University of Mannheim, Germany and

National Bureau of Economic Research (NBER), Cambridge, Massachusetts

Anette Reil-Held

Mannheim Research Institute for the Economics of Aging (MEA) and

Sonderforschungsbereich 504, University of Mannheim, Germany

Reinhold Schnabel

Department of Economics, University of Essen, Germany

3.1. Introduction

3.2. Data

3.3. The Flow of Household Saving

3.4. The Stock of Wealth by Age and Birth Cohort

3.5. The Institutional Background for Saving in

Germany

3.6. Links between Saving Patterns and Public Policy

3.7. Conclusions

References

3.1. INTRODUCTION

Household saving is still little understood, and answers even to the most basic

questions – e.g., How does saving change over the life cycle? – are controversial.

Understanding saving behavior is not only an important question because the

division of income into consumption and saving concerns one of the most

fundamental hous ehold decisions but it is also of utmost policy relevance since

private household saving as a private insurance interacts with social policy as a

public insurance.

In accordance with the general aims of this book, this chapter has two main

purposes and is structured accordingly. In the first part, we describe how German

Life Cycle Savings and Public Policy

Copyright 2003, Elsevier Science (USA). All rights reserved.

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