Household Savings in Transition Economies
During the transition from central planning to market economies now under way in Eastern Europe, output levels first collapsed by 40 to 50 percent in most countries, then staged a modest recovery in the last two years. Longer-term revival of growth...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/03/437904/household-savings-transition-economies http://hdl.handle.net/10986/22359 |
| Summary: | During the transition from central
planning to market economies now under way in Eastern
Europe, output levels first collapsed by 40 to 50 percent in
most countries, then staged a modest recovery in the last
two years. Longer-term revival of growth requires a
resumption of investment and thus, realistically, of
domestic savings. To explore the determinants of household
savings rates in transition economies, the authors studies
matching household surveys for three Central European
economies: Bulgaria, Hungary, and Poland. They find that
savings rates strongly increase with relative income,
suggesting that increasing income inequality may play a role
in determining savings rates. Savings rates are
significantly higher for households that do not own their
homes or that own few of the standard consumer
durables - possibly because, with no retail credit or mortgage
markets, households must save to purchase houses and
durables. The influence of demographic factors broadly
matches earlier findings for developing countries. Perhaps
surprisingly, variables associated with the households
position in the transition process - including either sector
of employment (public or private) or form of employment - do
not play a significant role in determining savings rates. |
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