THE SAVING OF THE ELDERLY IN MICRO AND MACRO DATA

Examination of household (micro) data on the elderly has generally con cluded that they do not dissave significantly, whereas estimates using aggregate (macro) data have shown that the presence of a large elderl y population leads to a lower saving rate. This paper shows that if in teractions between generations are important, one would not expect the se estimates to be the same. The paper presents new evidence that bequ ests are plausibly the source of this discrepancy. Examination of data from young households that have received or expect bequests confirms that bequests are indeed an important factor determining the saving of the young.