Culture has ‘significant’ effect on Swiss saving – paper

Cultural differences have a statistically significant effect on how much households save, a working paper published by the European Central Bank (ECB) argues.

In Culture and household saving, Benjamin Guin uses data on savings from the Swiss Household Panel, complemented with other data to build up a fuller picture of households’ socioeconomic profiles. He then analyses this in terms of the historic differences in language spoken in different parts of the country.

Households that speak different languages but are similar in other respects have very different patterns of savings behaviour, he finds: “Low- and middle-income households located in the German-speaking part are more than 11 percentage points more likely to save than similar households in the French-speaking part.”

These different savings rates, he argues, are “consistent with different distributions of time preferences” and consistent with other results in the literature on savings preferences. He does not, however, find that the different cultural groups have different tendencies to share risks across households, which he notes would tend to lower ex-ante savings.