Population Aging and Households? Saving in the Russian Federation

46 Pages Posted: 20 Apr 2016

See all articles by Maurizio Bussolo

Maurizio Bussolo

World Bank - Chief Economist Office for Europe and Central Asia

Simone Schotte

German Institute of Global and Area Studies (GIGA)

Mikhail Matytsin

World Bank

Date Written: October 15, 2015

Abstract

Using household data from the Russian Longitudinal Monitoring Survey, this paper assesses how aging affects saving. To overcome a systematic bias against the life-cycle hypothesis of survey data, the paper estimates how the age profile of saving changes when the micro data are corrected to account for the contribution to pensions (as additional saving) and receipt of benefits from pensions (as dissaving). With these corrections, the Russian data support the life-cycle hypothesis. A small decline in the aggregate saving rate, because of aging, can thus be expected. However, since aggregate saving rates result from a combination of age and cohort effects, this decline may not be significant. When extrapolating the rising trends of the cohort effect, the fact that younger generations are earning and saving more than older generation at the same age, the projection shows a growing aggregate saving rate. The changes in saving of future cohorts, for example because of changes in the growth rate of the economy, can affect the aggregate saving rate even more than aging.

Keywords: Democratic Government, Administrative & Civil Service Reform, De Facto Governments, Public Sector Administrative & Civil Service Reform, Pensions & Retirement Systems, Public Sector Administrative and Civil Service Reform

Suggested Citation

Bussolo, Maurizio and Schotte, Simone and Matytsin, Mikhail, Population Aging and Households? Saving in the Russian Federation (October 15, 2015). World Bank Policy Research Working Paper No. 7443. Available at SSRN: https://ssrn.com/abstract=2675358

Maurizio Bussolo (Contact Author)

World Bank - Chief Economist Office for Europe and Central Asia ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://https://blogs.worldbank.org/team/maurizio-bussolo

Simone Schotte

German Institute of Global and Area Studies (GIGA) ( email )

Neuer Jungfernstieg 21
Hamburg, DE D-20354
Germany

Mikhail Matytsin

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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