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Viewing report
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Ageing in the European Labor Market. Edition No. 1
VDM Publishing House, Dec 2009, Pages: 52
In the last decade there was a huge fall in global savings and it is expected to decrease further. There are many reasons for this fall but demographic structure is also thought to have contributed to this fall in saving if we assume closed economy case, but in the world of integrated capital market capital will flight to the place where the return is high or where young age dependency rate is high. The paper examines effect of dependency rates on savings rate. This dependency hypothesis has been investigated by analysis of the effects of high dependency rates on national savings rates. A major contribution is empirical evidence on the impact of dependency rates on savings rate was highly significant and greater than that found in previous studies: typically an increase in the dependency rate by one point led approximately to a seven percentage fall in the aggregate savings rate.
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