Search results

Saving is essential to the health of economies and households, yet relatively little scholarship investigates saving behaviors among the urban working class in the nineteenth century. This chapter uses five surveys of industrial workers in 1880s New Jersey, an analysis of which reveals sophisticated saving behaviors consistent with life-cycle and precautionary theories. The mean saving rate was between 8% and 12% of annual income. Younger households saved less than older households. Householders with longer expected careers, on average, saved less. Life insurance and fraternal societies were the most popular saving vehicles, but workers also used savings banks and building and loan associations, alone and in combination.

The purpose of this study is to examine the impact of remittance inflow on households’ savings behaviour in Bangladesh. Remittances are considered as the countercyclical flow of income for its recipient economies. It surges the liquidity of the households receiving remittances, allows them to endure local economic shocks and facilitates them to practice productive activities. Remittances often form a big pool of resources for investment which complement the national savings and support the country’s growth through higher rates of capital accumulation. Therefore, if a significant portion of the remittance is used for savings it can lead to prominent economic growth in the long term.

Existing literature indicates remittance-receiving households have a greater propensity to use remittance income to meet basic consumption. However, based on the survey conducted by the Bangladesh Bureau of Statistics on remittances and household savings (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s saving (SIR, 2016) and using the ordinary least square regression analysis method, to identify the connection between remittances and household’s savings behaviour in Bangladesh.

The findings of this study represent remittances encourage households to pursue different kinds of savings in Bangladesh. Savings are made in the form of opening savings accounts, deposit pension scheme/fixed deposits/Bonds, insurance policies, also savings through non-governmental organizations, cooperative societies and savings at home. Other than remittances the demographic characteristics of the household head also influence the savings choices.

To enable the implementation of appropriate policies to boost savings, analysis from both perspectives; the household and the national level, requires strong vigilance and surveillance.

This paper examines the determinants of savings among low-income households, regarded as non-Ricardian households (NRHs), in South Africa. NRHs comprise low-income households largely depending on government welfare benefits for sustenance. This research investigates socio-economic factors determining savings pattern of low-income households in South Africa.

The research makes use of the National Income Dynamics Study (NIDS) data set wave one to five. The longitudinal survey models are analysed in determining the socio-economic characteristics of NRH in South Africa. The estimators include Pooled ordinary least square (OLS), fixed and random effects methods.

The household grant contributes positively to the level of savings, but the savings level is still considerably low: majority of the low-income households have zero or negative savings. The average size of a NRH is about twice the size of the Ricardian, despite the NRHs’ debt burden impoverishing them.

The self-perpetuated poverty problem makes every factor in the vicious cycle both cause and effect of another factor, warranting reverse causality and threatening the reliability of Pooled OLS estimates for the research.

The growing cost of government grant hinges on the increased level of inflation while largely depending on the number of households entering the low-income threshold.

The study recommends that the government creates a more enabling environment for NRHs to engage in productive activities. Also they create more low-skilled jobs and encourage reduction of birth rate among low-income households; this will reduce their expenditure and increase their level of savings and will assist in pulling them out of the vicious circle of poverty. Government can boost NRHs’ savings through increase in various grants.

The study makes significant contribution towards addressing the unfortunate situation of household savings among low-income brackets in South Africa. The research corroborates other studies on the effectiveness of the fiscal stimulus package to boost the welfare and savings condition of NRHs in South Africa. The result explicitly confirmed the redistribution policy of the grant to the low-income household. The grant has a significant positive effect on the savings pattern of the household. An increase in it beyond the poverty threshold could indeed break the vicious circle of poverty since the effect does not only stop at expenditure but also pass through to savings, which may ultimately boost investment. Further studies should continue the investigation of grant transmission channels to investment and income.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2019-0692

The increase in volumes and circulation of internal and international remittances have become a substantial part of resource flow for economic development especially in developing countries with a significant impact on household welfare. The purpose of this paper is to examine the relationship between remittances and savings mobilization.

Using the most recent wave of the Ghana Living Standard Survey data, the study accounts for the endogeneity in remittance receipts by employing treatment effect estimators, in addition to a probit model to establish the relationship between remittances and likelihood of savings.

The results suggest that receiving remittances significantly affects household’s propensity to save. Households that receive international remittances seem to have a slightly higher probability of savings compared to households that receive only domestic remittances.

From the literature, whereas the theoretical relationship between savings and remittances is mixed, it is also evident that the empirical relationship between remittances and savings has not been clearly established, especially in sub-Saharan African countries in general and Ghana in particular. The present study adds to the paucity in the literature in two main ways. First, the study provides empirical evidence on the relationship between remittances and savings by not only focusing on international remittances but also on internal remittances. Second, in sharp departure from other studies, the current study employs more robust empirical estimators in estimating the relationship between remittances and savings.

The purpose of this paper is to empirically investigate the effects of farm income variability, farm size, and other socio‐demographic characteristics on the precautionary saving behavior of farm households and to estimate the influences of the identified factors on the amount of savings by self‐employed farm households.

Using 2003 Agricultural Resource Management Survey (ARMS) data and a Double‐Hurdle procedure, the likelihood and the amount of savings by farm households are estimated.

An important empirical finding of this study is that variability in income plays an important role in explaining precautionary savings of US farm households. Findings suggest that farm households facing higher income risk save more and accumulate more wealth. It is indicated that several farm, operator, household, and demographic attributes contribute to the precautionary savings of farm households. In particular, results show that educational attainment by operator and spouses have positive impact on the decision to save. In addition, results from this study show that farms that specialize in cash grain are likely to have precautionary savings.

Farm households today are virtually indistinguishable from non‐farm households in their levels of income and diversity of employment. As a result, government policies that influence general economic conditions have much more profound impacts on farm families. Federal support of farm income warrants continued scrutiny. This paper shows that greater income uncertainty increases savings and wealth of farm households. Therefore, farm policies that reduce income variability or uncertainty will have an impact on precautionary savings and wealth of farm households.

Several studies have investigated savings of households; however, these studies are limited to entire US population, older Americans, or non‐self‐employed individuals in the USA. Little is known about the savings behavior of self‐employed US farm households owing to a lack of household survey data and because of the complex relationship between the farm household and farm business in terms of resource allocation (both capital and labor).

This study investigates the factors influencing household financial choices in Malawi. The authors also compare how household financial decisions differ in urban and rural areas.

The authors utilize the logit model to examine the factors that influence household financial decisions using the Malawi Integrated Household Survey 2019–20, while Oaxaca–Blinder decomposition is used to estimate the variations in household financial decisions between urban and rural areas.

The authors find that the likelihood of saving increases with income, secondary and tertiary education, and age. The likelihood of saving also decreases with household size and remittances. Additionally, the authors report that marriage reduces the likelihood of loans, whereas sex, age, and income raise the likelihood of loans. According to this study’s findings, income discrepancies between urban and rural samples account for most observed household financial variations. The authors also find that most of the observed variations in household financial decision-making between urban and rural households are reduced when income equality, participation in agriculture, university education, and household size are considered.

Using data from the Malawi Integrated Household Survey 2019–20, this research analyzes the components that affect household financial decisions. While most studies only look at one component of household finances, this study concurrently addresses debt and savings. The study also evaluates whether changes in the variables between urban and rural households impact those households' financing choices.

Ethiopia suffers from structural food insecurity due to its low food production, low purchasing power, and climatic shocks such as drought. Coffee is Ethiopia's primary source of foreign earnings, and 95% of it is produced by smallholder farmers. Coffee also provide better income to smallholder farmers than other crops. However, it is unclear how much smallholder coffee producers participate in cash savings and if their savings help them attain food security. In this study, the authors aim to assess the impact of cash savings on the food security of smallholder coffee farmers in Ethiopia.

Using cross-sectional quantitative data from 336 randomly selected households and qualitative data from the local community, this study examines the impact of cash savings on household food security. Logistic regression and propensity score matching models were used to analyze the impact of cash savings on households' food security.

About, 43.5% of coffee farmers did not participate in cash savings during the study period, while 50.6% had no access to credit. The major factors that limit households' likelihood of participating in cash saving were the gender of household head and family size. Approximately, 38.4 and 27.1% of coffee farmers were food poor based on calorie intake and consumption scores, respectively. Households' participation in saving increases their ability to meet dietary energy requirements and consume diverse foods.

To the knowledge of the author, empirical studies that examined the impact of cash saving on the food security status of smallholder farmers in the study area are limited. Therefore, this study brings original contribution and fills research gap on coffee farmers' cash saving and food security; that received little attention from previous researchers in Ethiopia.

The purpose of this paper is to examine the effect of savings mobilization on access to credit among smallholder farmers’ in the Birim central municipality of Ghana.

A cross-sectional primary data set was used to estimate the factors influencing smallholder farmers’ access to credit and size of loan to be borrowed using the IV-Probit and IV-Tobit model.

The results of the study revealed that savings mobilization has a positive significant impact on access to credit and the total amount of credit one can borrow as well. Other control variables such as transaction cost and farm size depicted a negative significant impact on access to credit. Land ownership, member of an association, household size, years of farming experience and education also showed a positive significant impact on access to credit.

The paper only examined the savings effect on credit accessibility among smallholder farmers in one of the municipality’s in the Eastern region of Ghana. Future research should consider all or many municipality for an informed generalization of findings.

This paper provides evidence that smallholder farmers knowledge on the financial market is poor and it would require the policymakers or NGOs to organize financial management training programs so that the farmers high ignorance of the financial market will significantly reduce.

Although existing studies have examined smallholder farmers’ access to credit, the unique contribution of this paper is the analysis of the impact of saving mobilization on credit accessibility in Ghana, a major access to credit determinant in the financial market. In addition, those researchers who factored in savings as an access to credit determinant did not also consider the casual relationship between these two variables, thus, the present of endogeneity of which this paper does.

This chapter uses a dynamic structural model of household choices on savings, consumption, fertility, and education spending to perform policy experiments examining the impact of tax-free education savings accounts on parental contributions toward education and the resulting increase in the education attainment of children. The model is estimated via maximum simulated likelihood using data from the National Longitudinal Survey of Young Women. Unlike many similarly estimated dynamic choice models, the estimation procedure incorporates a continuous variable probability distribution function. The results indicate that the accounts increase the amount of parental support, the percent contributing and education attainment. The policy impact compares favorably to the impact of other policies such as universal grants and general tax credits, for which the model gives results in line with those from other investigations.

Based on empirical patterns of annual earnings and saving from new micro-data covering a large sample of American workers around a hundred years ago, we develop a model for simulating the cross-section distribution of wealth at the turn of the twentieth century. Our methodology allows for a direct comparison with the wealth distribution from a sample of families in a comparable part of the contemporary income distribution. Our primary finding is that patterns of wealth accumulation among American workers at the turn of the century bear a striking resemblance to contemporary profiles.