The Origins of Savings Behavior

54 Pages Posted: 28 Jul 2010 Last revised: 16 Nov 2013

See all articles by Henrik Cronqvist

Henrik Cronqvist

University of Miami - Department of Finance

Stephan Siegel

University of Washington - Michael G. Foster School of Business; CESifo

Date Written: November 7, 2013


Analyzing a large sample of identical and fraternal twins matched with data on their savings behavior, we find that genetic differences explains about 33 percent of the variation in savings propensities across individuals. Each individual is born with a genetic predisposition to a specific savings behavior, an effect that is found not to disappear later in life. Parenting contributes to the variation in savings rates among younger individuals in our sample, but its effect has decayed significantly for middle-aged and older individuals. The family environment when growing up (e.g., parents' wealth) and an individual's own current socioeconomic status moderate genetic effects. Finally, we find that savings is genetically correlated with income growth, smoking, and obesity, suggesting that the genetic component of savings behavior reflects genetic differences across individuals with respect to time preferences or self-control. We discuss implications of these findings for public policy.

Keywords: Savings, Consumption, Behavioral Genetics

Suggested Citation

Cronqvist, Henrik and Siegel, Stephan, The Origins of Savings Behavior (November 7, 2013). AFA 2011 Denver Meetings Paper, Available at SSRN: or

Henrik Cronqvist (Contact Author)

University of Miami - Department of Finance ( email )

5250 University Drive
220 Jenkins Building
Coral Gables, FL 33146
United States
(305) 284-9482 (Phone)


Stephan Siegel

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States


CESifo ( email )

Poschinger Str. 5
Munich, DE-81679

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