Scandinavian Working Papers in Economics

SIFR Research Report Series,
Institute for Financial Research

No 73: The Origins of Savings Behavior

Henrik Cronqvist () and Stephan Siegel ()
Additional contact information
Henrik Cronqvist: Claremont McKenna College
Stephan Siegel: University of Washington

Abstract: What are the origins of individual savings behavior? Using data on identical and fraternal twins matched with data on their savings behavior, we find that an individual's savings propensity is governed by both genetic predispositions, social transmission from parents to their children, and gene-environment interplay where certain environments moderate genetic influences. Genetic variation explains about 35 percent of the variation in savings rates across individuals, and this genetic effect is stronger in less constraining, high socioeconomic status environments. Parent-child transmission influences savings for young individuals and those who grew up in a family environment with less competition for parental resources. Individual-specific life experiences is a very important explanation for behavior in the savings domain, and strongest in urban communities. In a world progressing rapidly towards individual retirement savings autonomy, understanding the origins of individuals' savings behavior are of key importance to economists as well as policy makers.

Keywords: Savings; Consumption; Behavioral Genetics

JEL-codes: D10; D31; G11

48 pages, September 15, 2010

Full text files

sifr-wp73.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Anki Helmer ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:37:50.