The implications of population ageing on savings rates
Changes in population structure can have a great impact on savings rates. This study investigated the relationship that exists between the aging population and the savings rate in South Africa. The gross savings of South Africa from 1995 to 2017 was analysed. A fixed effect model and a random effect...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Zaporizhzhia National University
2023-06-01
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| Series: | Менеджмент та підприємництво: тренди розвитку |
| Subjects: | |
| Online Access: | https://management-journal.org.ua/index.php/journal/article/view/438/223 |
| _version_ | 1797785880498274304 |
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| author | Nomusa Yolanda Nkomo Eyitayo Francis Adanlawo |
| author_facet | Nomusa Yolanda Nkomo Eyitayo Francis Adanlawo |
| author_sort | Nomusa Yolanda Nkomo |
| collection | DOAJ |
| description | Changes in population structure can have a great impact on savings rates. This study investigated the relationship that exists between the aging population and the savings rate in South Africa. The gross savings of South Africa from 1995 to 2017 was analysed. A fixed effect model and a random effect model were used as baselines for arbitrary correlations between unobserved heterogeneity and independent variables. The Hausman test was utilized to find a more efficient and consistent model that produces consistent results. The argument of the Lice Cycle Hypothesis developed by Modigliani (1970) and those previous research findings in which the rising older population has a tendency to decrease the rates of savings were followed in this paper. The findings revealed that an increase in old-age dependency does not cause the level of savings to decline but will rather lead to an increase in savings. The findings agree with the bequest theory, which states that old people save up their money for their upcoming generation. Due to the findings obtained in this paper, economic policies that aim to increase savings through demographics might not be relevant and are therefore not suggested. |
| first_indexed | 2024-03-13T01:00:19Z |
| format | Article |
| id | doaj.art-ad2123958fb94b0dac09bf6cf857b638 |
| institution | Directory Open Access Journal |
| issn | 2522-1566 |
| language | English |
| last_indexed | 2024-03-13T01:00:19Z |
| publishDate | 2023-06-01 |
| publisher | Zaporizhzhia National University |
| record_format | Article |
| series | Менеджмент та підприємництво: тренди розвитку |
| spelling | doaj.art-ad2123958fb94b0dac09bf6cf857b6382023-07-06T12:27:23ZengZaporizhzhia National UniversityМенеджмент та підприємництво: тренди розвитку2522-15662023-06-0122481610.26661/2522-1566/2023-2/24-01The implications of population ageing on savings ratesNomusa Yolanda Nkomo0https://orcid.org/0000-0002-6526-6227Eyitayo Francis Adanlawo1https://orcid.org/0000-0002-5407-5724Department of commerce foundation, University of Zululand, South AfricaSocial Transformation Research Entity, Faculty of Humanities, North-West University, Mafikeng, South AfricaChanges in population structure can have a great impact on savings rates. This study investigated the relationship that exists between the aging population and the savings rate in South Africa. The gross savings of South Africa from 1995 to 2017 was analysed. A fixed effect model and a random effect model were used as baselines for arbitrary correlations between unobserved heterogeneity and independent variables. The Hausman test was utilized to find a more efficient and consistent model that produces consistent results. The argument of the Lice Cycle Hypothesis developed by Modigliani (1970) and those previous research findings in which the rising older population has a tendency to decrease the rates of savings were followed in this paper. The findings revealed that an increase in old-age dependency does not cause the level of savings to decline but will rather lead to an increase in savings. The findings agree with the bequest theory, which states that old people save up their money for their upcoming generation. Due to the findings obtained in this paper, economic policies that aim to increase savings through demographics might not be relevant and are therefore not suggested.https://management-journal.org.ua/index.php/journal/article/view/438/223aging populationbequest theorylabour forcelife cycle theorysavings rates |
| spellingShingle | Nomusa Yolanda Nkomo Eyitayo Francis Adanlawo The implications of population ageing on savings rates Менеджмент та підприємництво: тренди розвитку aging population bequest theory labour force life cycle theory savings rates |
| title | The implications of population ageing on savings rates |
| title_full | The implications of population ageing on savings rates |
| title_fullStr | The implications of population ageing on savings rates |
| title_full_unstemmed | The implications of population ageing on savings rates |
| title_short | The implications of population ageing on savings rates |
| title_sort | implications of population ageing on savings rates |
| topic | aging population bequest theory labour force life cycle theory savings rates |
| url | https://management-journal.org.ua/index.php/journal/article/view/438/223 |
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