Friday 11 June 2010

The answer to low savings rates ..............

more gay couples. At least this is the answer from Tim Harford. He writes
IZA DP No. 4961

Brighita Negrusa, Sonia Oreffice:

Sexual Orientation and Household Savings: Do Homosexual Couples Save More?

Abstract:
We analyze how sexual orientation is related to household savings using 2000 US Census data, and find that gay and lesbian couples own significantly more retirement income than heterosexuals, while cohabiting heterosexuals save more than their married counterparts. In a household savings model, we interpret this homosexual-specific differential as due to the extremely low fertility of same-sex couples, in addition to the precautionary motives driving cohabiting households to save more than married ones. Evidence from homeowners’ ratio of mortgage payments to house value exhibits the same pattern of savings differentials by sexual orientation and cohabiting status.
I would list a number of caveats at this point but who cares? Thoughtful people will know exactly what they are and trolls will do what trolls do.
Not an answer I had seen before ... or even thought of.

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