Does population ageing affect savings in Europe?

Abstract

ABSTRAC: Ageing is going to be greater and greater in the forthcoming decades. At the same time, old-aged dependency and longevity occur due to rising life expectancy at birth. Our study aims to examine the effect of population ageing on private savings. A panel data of a sample of selected European countries collected from the World Bank (WB, 2016) – World Development Indicators (WDI) database is used, in order to analyze possible heterogeneity across and multiple subsamples. The span period is 1990–2013. Besides, economic growth and crisis provide empirical support. Our findings show that longevity and dependency rates have both significant impacts on savings. However, the results are influenced by the way in which the data is managed. Therefore, this calls into question the practice of applying for a reform in the government’s old-age support programs. Besides, the paper makes a good contribution to knowledge: firstly, it is innovative since it puts together demographic and economic variables among a selected group of developed countries; secondly, it uses a very up-to-dated database; and thirdly, it fills a gap in the literature.