The Economic studies quarterly 

About: The Economic studies quarterly is an academic journal. The journal publishes majorly in the area(s): Value-added tax & Consumption (economics). It has an ISSN identifier of 0557-109X. Over the lifetime, 496 publications have been published receiving 2688 citations.

National saving rates and population growth: a new model and new evidence.

Abstract: This study presents new analysis and evidence on the link between population growth and national saving Analysis was based on the variable rate-of-growth effect model (Mason 1981; Fry and Mason 1982) which distinguishes 2 population growth effects: the rate of growth effect and the dependency effect The papers 1st section reviews previous research on the saving population growth link including applications of the variable rate-of-growth effect model Its 2nd part presents an extension of the variable rate-of-growth effect model by linking factors determining the number of children reared to the budget shares devoted to childbearing and in turn to the national saving rate Part 3 presents estimates from international cross-section data covering the 1960-80 period The final section uses the neoclassical growth model to show circumstances under which the rate of growth effect dominates the dependency effect reversing the relationship between population growth and saving Available evidence from the international cross-section supports the proposition that a higher dependency ratio leads to lower saving particularly among countries with moderate to high rates of income growth At the mean rate of growth observed over the last 2 decades for the 70 countries analyzed a decline from a high to a low childbearing regime generated an increase in the net national saving rate of about 5% -- nearly a 50% increase The results reported also addressed the magnitude and validity of the equivalent adult consumer unit Aggregate consumption data imply an equivalent adult consumer unit of about 1/3 The analysis implies that simulation models that are based on equivalent adult consumer unit can provide useful insights about the relationship between population growth and aggregate consumption and saving rates The analysis fails to fully resolve the issue of the relative importance of the rate of growth and dependency effects It is based on the neoclassical growth model for which the equilibrium rate of growth of national income increases point for point with an increase in the rate of growth of population Given the long periods required to adjust from one equilibrium to another the steady-state results of the neoclassical model may have limited relevance to the design and evaluation of development and population policy Although the model proposed clearly delineates the link between children household saving and national saving the role ascribed to children is limited Only that children require household resources for their support is acknowledged