Why Do People Save? An Intergenerational Analysis of Saving Behavior

Abstract

As a result of inadequate savings among the majority of adults in the United States, saving behavior and the motives behind saving have been the focus of various studies. This empirical study first outlines a theoretical framework regarding saving behavior. Then, using data from the Panel Study of Income Dynamics, this study employs a regression analysis to analyze the relationship between parental saving behavior and the subsequent saving behavior of their adult child. Ultimately, the results suggest a positive correlation between parental saving preference and behavior and that of their child later in life.