Linking self-control to saving differences: An analysis across countries
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2017-08-24
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en
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Abstract
In the debate that counterpoises cognitive and non-cognitive abilities, IQ is researched in differences across countries and associated to several factors, among which differences in savings. On the other side, non-cognitive factors such as self-control, while researched at the micro level, are not often analyzed cross-country. The main aim of this research is thus to identify the elements that form self-control at the national level and analyzing whether the overall index has predictive power in explaining savings. Alongside, it is explored which of the components is better at predicting savings. Lastly, a comparison between IQ and Self-Control is run to understand which one has more explanatory power. The method consisted in studying the theoretical literature, leading to the identification of the capacity of exercising self-control, and the desire/interest in exercising it. The former is measured through household survey data, and the latter with cultural indexes and institutional constraints. Results found strong relationship between national indexes of self-control and private savings, where the cultural component dominates the household one. IQ and Self-Control have similar power in explaining savings, and are highly correlated with each other. Overall, self-control seems an important factor in determining differences in private savings across countries.
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Faculteit der Managementwetenschappen