Do Saving Incentives Work?

96 Pages Posted: 4 Jul 2014

See all articles by William G. Gale

William G. Gale

Brookings Institution

Eric M. Engen

Federal Reserve Board

John Karl Scholz

University of Wisconsin - Madison - La Follette School of Public Affairs

Date Written: 1994


American Saving Rates have recently fallen to their lowest levels since 1950. After averaging roughly 8 percent in the 1950s, 1960s, and 1970s, the net national saving rate fell to about 4.5 percent in the 1980s and has fallen below 2 percent since 1990. The personal saving rate has also declined, from an average of 7 percent between 1950 and 1980 to an average of 4.6 percent since 1990. These declines have raised concerns that the economy may be unable to finance investment and sustain growth over the long run and that a significant fraction of the baby-boom generation may not be saving adequately for retirement.

Keywords: saving, retirement

JEL Classification: E21

Suggested Citation

Gale, William G. and Engen, Eric M. and Scholz, John Karl, Do Saving Incentives Work? (1994). Available at SSRN: or

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

Eric M. Engen

Federal Reserve Board ( email )

20th St. and Constitution Ave., NW
Washington, DC 20551
United States

John Karl Scholz

University of Wisconsin - Madison - La Follette School of Public Affairs

1225 Observatory Drive
Madison, WI 53705
United States

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