Soviet household saving: a cross-section study of Soviet emigrant families
Investigates Soviet household saving behavior using data from a retrospective survey of 1000 Jewish families who emigrated from the Soviet Union in the 1970s. The authors assert that it is appropriate to use Western theories of saving behavior--especially the permanent income and life-cycle hypotheses--to explain similar Soviet behavior. The empirical evidence supports these hypotheses and all the standard features are observed. However, the high level of income stability reduces the marginal propensity to save and brings it very close to the average rate. Lack of investment opportunities, free education and health services, and low-rent housing, reduce the average savings rate to below those levels found in market economies. Lack of credit, unpredictability in the supply of goods, and repressed inflation do not result in inordinately high savings rates. However, the analysis is not sharp enough to exclude the possibility that some savings represent forced savings resulting from shortages at the official prices.