Macro and Socioeconomic Determinants of Turkish Private Savings

Abstract

This study investigates the effects on private saving rates of a number of macroeconomic and socio economic variables, by estimating an empirical private savings model for Turkey over the period 1975-2008. The following variables are found to increase savings: inflation, income level, terms of trade, real interest rates, credits, young dependency ratio, urbanization rate, economic crisis and political instability and the following variables are found to decrease it: financial depth, income growth, current account deficit, old dependency ratio and life expectations. Last but not least, we find that the private savings have strong inertia, and government savings tends to partially crowd out them. On the other hand, we also find that the female labor participation rate, the rate of self-employed employment and the rate of employment having university education decrease savings in Turkey after 1988.