Household Savings in Transition Economies

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Based on matching household surveys for three central European countries, Bulgaria, Hungary and Poland, we explore the determinants of household saving rates in transition economies. We find savings rates to increase strongly in relative income and to be significantly higher for households owning few of the standard consumer durables, consistent with anticipatory savings prior to durable purchases in the absence of retail credit markets. The influence of demographic factors broadly matches earlier findings for developing countries. Perhaps surprisingly, variables associated with the position of the household in the transition process, notably the sector of employment, plays no significant role in determining savings rates.

Published: Published as "Large-Scale Privatization in Transition Economies", American Economic Review, Vol. 83, no. 5 (1993): 1199-1210.

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