To Save or Not To Save

This article reports on a study conducted by Steven F. Venti and David A. Wise. Using HRS data, they investigated why the personal savings rate in the U.S. is so low. Contrary to the popular explanation of people earning just enough to get by, Venti and Wise found lots of people who earn high incomes but save very little and people with low incomes who manage to save a lot. They argue that this large discrepancy, which exists at all income deciles, is due to the fact that the government is actually discouraging saving by taxing wealth.