TY  - JOUR
AU  - Dobrescu,Loretti I.
AU  - Kotlikoff,Laurence J.
AU  - Motta,Alberto F.
TI  - Why Aren't Developed Countries Saving?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14580
PY  - 2008
Y2  - December 2008
UR  - http://www.nber.org/papers/w14580
L1  - http://www.nber.org/papers/w14580.pdf
N1  - Author contact info:
Loretti I. Dobrescu
University of New South Wales
Australian School of Business
School of Economics, Room 442B
Sydney 2052 AU
E-Mail: dobrescu@unsw.edu.au

Laurence J. Kotlikoff
Department of Economics
Boston University
270 Bay State Road
Boston, MA 02215
Tel: 617/353-4002
Fax: 617/353-4001
E-Mail: kotlikoff@gmail.com

Alberto Motta
Department of Economics
University of Padua
33 Via del Santo
Padua 35123 Italy
E-Mail: al-berto.motta@unipd.it
AB  - National saving rates differ enormously across developed countries. But these differences obscure a common trend, namely a dramatic decline over time. France and Italy, for example, saved over 17 percent of national income in 1970, but less than 7 percent in 2006. Japan saved 30 percent in 1970, but only 8 percent in 2006. And the U.S. saved 9 percent in 1970, but only 2 percent in 2006. What explains these international and intertemporal differences? Is it demographics, government spending, productivity growth or preferences? Our answer is preferences. Developed societies are placing increasing weight on the welfare of those currently alive, particularly contemporaneous older generations. This conclusion emerges from estimating two models in which society makes consumption and labor supply decisions in light of uncertainty over future government spending, productivity, and social preferences. The two models differ in terms of the nature of preference uncertainty and the extent to which current society can control future societies' spending and labor supply decisions.
ER  -