Schnabel, R.; Börsch-Supan, A.; Reil-Held, A.; Rodepeter, R.; Winter, J.:
The German Savings Puzzle
In: Sonderforschungsbereich 504 Publications - Mannheim, 2000
2000Buchaufsatz/Kapitel in Sammelwerk
The German Savings Puzzle
Schnabel, R.LSF; Börsch-Supan, A.; Reil-Held, A.; Rodepeter, R.; Winter, J.


Germany has one of the most generous public pension and health insurance systems of the world, yet private savings are high until old age. Savings remain positive in old age, even for most low income households. How can we explain what we might want to term the 'German savings puzzle?' We provide a complicated answer that combines historical facts with capital market imperfections, housing, tax and pension policies. The first part of the paper describes how German households save, based on a synthetic panel of four cross sections of the German Income and Expenditure Survey ('Einkommens- und Verbrauchsstichproben') collected between 1978 and 1993. The second part links saving behavior with public policy, notably tax and pension policy.