NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Martin Blomhoff Holm

Department of Economics
University of Oslo
Moltke Moes Vei 31
0851 Oslo
Norway

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University of Oslo

NBER Working Papers and Publications

December 2019Saving Behavior Across the Wealth Distribution: The Importance of Capital Gains
with Andreas Fagereng, Benjamin Moll, Gisle Natvik: w26588
Do wealthier households save a larger share of their incomes than poorer ones? We use Norwegian administrative panel data on income and wealth to answer this empirical question. The relation between saving rates and wealth crucially depends on whether saving includes capital gains. Saving rates net of capital gains ("net saving rates") are approximately constant across the wealth distribution. However, saving rates including capital gains ("gross saving rates") increase markedly with wealth. The proximate explanation is that wealthier households own assets that experience persistent capital gains which they hold onto instead of selling them off to consume ("saving by holding"). These joint patterns for net and gross saving rates challenge canonical models of household wealth accumulation. ...
 
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