The Decline in Household Saving: What Can We Learn from Survey Data?

Barry P. Bosworth Lisa Bell



We examine the saving decline from the perspective of microeconomic survey data on the wealth position of American households. Can the surveys provide information on the nature and causes of the saving decline that are not evident in the macroeconomic information? The analysis concentrates on data obtained from six Surveys of Consumer Finances (SCF) covering the period of 1983-2001. The SCF had a panel dimension only in the 1983-89 period.

We conclude that the 1983-89 panel survey is a very valuable, but often ignored, exercise in measuring saving behavior. It is particularly instructive in demonstrating the heterogeneous nature of saving behavior and the dominant role of high-income households. Unfortunately, the panel component of the survey was discontinued after 1989. We conclude that cohort-based estimates of saving that can be derived from successive rounds of the SCF cross-section are not effective substitutes for a panel survey. The most substantial opportunity to improve our knowledge of the reasons for the decline in household saving would be to repeat the 1989 exercise by re-interviewing a portion of the households in each SCF survey.