The effectiveness of tax incentives to encourage private savings
This study examines the impact of tax incentives for long-term savings on total private savings using data for Latvia contained in HFCS 2014 and 2017. The survey shows that contributions to tax-favoured savings plans are not associated with lower consumer spending and therefore do not contribute to...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2022-07-01
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| Series: | Baltic Journal of Economics |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/1406099X.2022.2109555 |
| _version_ | 1828119440096493568 |
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| author | Ludmila Fadejeva Olegs Tkacevs |
| author_facet | Ludmila Fadejeva Olegs Tkacevs |
| author_sort | Ludmila Fadejeva |
| collection | DOAJ |
| description | This study examines the impact of tax incentives for long-term savings on total private savings using data for Latvia contained in HFCS 2014 and 2017. The survey shows that contributions to tax-favoured savings plans are not associated with lower consumer spending and therefore do not contribute to an increase in private savings. Instead, these savings are achieved by lowering other, non-tax-favoured savings. This substitution effect on non-tax-favoured savings remains statistically significant even when excluding households with very low consumption levels and the ones whose reference person is relatively young/old and with a low level of education. However, the observed effect is not significant at the very bottom of the distribution of non-tax-favoured savings. The results of this study raise concerns that without additional measures to encourage retirement savings, particularly in the lower segment of the savings distribution, income inequality among retirees will continue rising. |
| first_indexed | 2024-04-11T13:48:22Z |
| format | Article |
| id | doaj.art-5a44612b840d4cd0b1cb1f5515609adf |
| institution | Directory Open Access Journal |
| issn | 1406-099X 2334-4385 |
| language | English |
| last_indexed | 2024-04-11T13:48:22Z |
| publishDate | 2022-07-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Baltic Journal of Economics |
| spelling | doaj.art-5a44612b840d4cd0b1cb1f5515609adf2022-12-22T04:20:51ZengTaylor & Francis GroupBaltic Journal of Economics1406-099X2334-43852022-07-0122211012510.1080/1406099X.2022.2109555The effectiveness of tax incentives to encourage private savingsLudmila Fadejeva0Olegs Tkacevs1Monetary Policy Department, Bank of Latvia, Riga, LatviaMonetary Policy Department, Bank of Latvia, Riga, LatviaThis study examines the impact of tax incentives for long-term savings on total private savings using data for Latvia contained in HFCS 2014 and 2017. The survey shows that contributions to tax-favoured savings plans are not associated with lower consumer spending and therefore do not contribute to an increase in private savings. Instead, these savings are achieved by lowering other, non-tax-favoured savings. This substitution effect on non-tax-favoured savings remains statistically significant even when excluding households with very low consumption levels and the ones whose reference person is relatively young/old and with a low level of education. However, the observed effect is not significant at the very bottom of the distribution of non-tax-favoured savings. The results of this study raise concerns that without additional measures to encourage retirement savings, particularly in the lower segment of the savings distribution, income inequality among retirees will continue rising.https://www.tandfonline.com/doi/10.1080/1406099X.2022.2109555Tax incentivessavingprivate pension fundsHFCSD14H24 |
| spellingShingle | Ludmila Fadejeva Olegs Tkacevs The effectiveness of tax incentives to encourage private savings Baltic Journal of Economics Tax incentives saving private pension funds HFCS D14 H24 |
| title | The effectiveness of tax incentives to encourage private savings |
| title_full | The effectiveness of tax incentives to encourage private savings |
| title_fullStr | The effectiveness of tax incentives to encourage private savings |
| title_full_unstemmed | The effectiveness of tax incentives to encourage private savings |
| title_short | The effectiveness of tax incentives to encourage private savings |
| title_sort | effectiveness of tax incentives to encourage private savings |
| topic | Tax incentives saving private pension funds HFCS D14 H24 |
| url | https://www.tandfonline.com/doi/10.1080/1406099X.2022.2109555 |
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