Title: Household savings of Slovakia: effects of banks, dependency ratio, transitory income and unemployment

Authors: Renáta Pitoňáková

Addresses: Faculty of Social and Economic Sciences, Comenius University in Bratislava, Mlynské luhy 4, 821 05 Bratislava, Slovakia

Abstract: The paper focuses on determinants of household savings in Slovakia applying quarterly data 1995 Q1 to 2015 Q1. The outcomes from the ARDL procedure suggest that in the long-run households are expecting their permanent income to be above their current income and that is associated with their dissaving behaviour, while favourable conditions in the short-run stimulate households to raise savings. The impact of credit institutions on savings is positive. Saving rate and dependency ratio of elderly stands in contradiction to the Life-Cycle Hypothesis as elderly population increases savings. Unemployment rate indicates a precautionary saving motive. About 63% of disequilibrium in the previous quarter will be corrected in the current quarter.

Keywords: household savings; savings rate; dependency ratio; banks; transitory income; ARDL; Slovakia; unemployment rate; banking industry; elderly population; old age; precautionary savings.

DOI: 10.1504/IJTGM.2017.082374

International Journal of Trade and Global Markets, 2017 Vol.10 No.1, pp.115 - 122

Received: 28 Jul 2016
Accepted: 06 Sep 2016

Published online: 19 Feb 2017 *

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