COHORT ANALYSIS OF SAVING BEHAVIOR BY US HOUSEHOLDS

The aim of this this paper is to shed some light in the decline in per sonal saving rates in the United States in the 1980s. For a such a pur pose the paper analyses file only U.S. data set containing information on consumption and income at the household level: the Consumer Expend iture Surveys (CEX) from 1980 to 1991. Because the CEX is riot a panel , most of the analysis is conducted using average cohort techniques. T he paper identifies a ''typical age profile'' for saving rates. Such a profile is hump shaped'' and peaks around age 57 The paper also argue s that such a profile was ''shifted down'' for the cohorts bent betwee n 1920 and 1939 relative to the younger and older cohorts considered T hese cohorts are the parents of the baby boom generation. The paper al so argues that these ''cohort effects'' can account for a nonneglible proportion of the decline in aggregate saving because these cohorts we re, during the 1980s, in the ages when saving rates ale typically high est. The result is robust to the consideration of several controls and holds for several definitions of consumption. The only exception is w hen durable expenditure is considered as saving rather than consumptio n.