Determinants of Household Savings in EU:What Policies for Increasing Savings?

The main sector of a national economy that saves is the household sector. Its saving behaviour is determined by a complex of economic, social, demographic and cultural factors. Their determination is of utmost importance for the foundation of the policies aimed at stimulating household savings.The present paper aims at identifying the main determinants of population savings using panel data for 15 countries of Western and Central and Eastern Europe for the 1995-2010 period.The empirical results obtained are quantified with the help of a fixed-country-specific effect model that estimates the gross saving rate. The model allowed for highlighting some individual particularities of the countries or some characteristics of the groups, showing that the type of saving behaviour is influenced by them. Thus, we suggest that the development level of an economy should be a main parameter in the decisional schemes aiming to stimulate household savings. We recommend avoiding to automatically take-up any “success model” of a country and its implementation in another country, because there are national specificities and behavioural parameters.