The cultural origin of saving behaviour
|Day:||Wed 3 Jul|
Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. The accepted view in economics so far is that culture does not have any effect on savings. We revisit this evidence using a novel dataset, Understanding Society, which allows us to study the saving behaviour of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behaviour, and their relevance persists up to three generations.