Do ageing economies save less? Evidence from OECD data

Wong, Benjamin and Tang, Kam Ki (2013) Do ageing economies save less? Evidence from OECD data. International Journal of Social Economics, 40 6: 591-605. doi:10.1108/03068291311321875

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Author Wong, Benjamin
Tang, Kam Ki
Title Do ageing economies save less? Evidence from OECD data
Journal name International Journal of Social Economics   Check publisher's open access policy
ISSN 0306-8293
Publication date 2013-05
Year available 2013
Sub-type Article (original research)
DOI 10.1108/03068291311321875
Open Access Status
Volume 40
Issue 6
Start page 591
End page 605
Total pages 15
Place of publication Bingley, W Yorks, United Kingdom
Publisher Emerald Group Publishing
Collection year 2014
Language eng
Formatted abstract
Purpose: The purpose of this paper is to re-examine the effect of population ageing on private saving, taking into account the fact that ageing is brought about by not only rising old-aged dependency but also expanding longevity.

Design/methodology/approach: The study uses panel data of 22 OECD countries from 1961 to 2010. Linear and non-linear panel regression methods are used. The study takes into account the time series characteristic of the data, such as the deterministic trend present in old-age dependency ratio.

Findings: Longevity consistently has a significant positive impact on savings, while old-aged dependency rate has no discernible impact once country-specific time trends in the data are accounted for. The general finding within the literature where old-age dependency exerts a negative impact on savings is sensitive to the manner in which the data is handled and/or the sample selected.

Originality/value: First, the authors jointly consider rising old-aged dependency and expanding longevity on savings, thus avoiding potential omitted variable bias in previous studies. Second, they explore non-linearity in the savings-ageing relationship which was ignored previously. Third, they identify whether saving rate and demographic measures are sharing common stochastic trends or driven by individual deterministic trends to avoid spurious regression results.
Keyword Ageing
Ageing (biology)
Elderly people
Old-age dependency
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2014 Collection
School of Economics Publications
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Citation counts: Scopus Citation Count Cited 2 times in Scopus Article | Citations
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Created: Tue, 07 May 2013, 09:37:49 EST by Alys Hohnen on behalf of School of Economics