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Office of Survey Methods Research
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Published Year: 2024
Survey/Program(s): Office of Prices and Living Conditions
Catalog: Economic Working Paper
WP Number: WP-575
Publication Status / Disposition: Review of Income and Wealth:
https://onlinelibrary.wiley.com/doi/full/10.1111/roiw.70004
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The Polarization of Personal Saving
Abstract
The Bureau of Economic Analysis and Bureau of Labor Statistics have estimated the first complete distribution of personal saving for the United States by estimating the joint distribution of disposable personal income and personal consumption expenditures. We start with household survey data augmented with data from administrative sources and modify these data such that they aggregate to the national accounts totals for 2004-2022. The augmented household survey data are corrected for suspected underreporting at the top and bottom of the income and expenditure distributions to allocate macro totals to households. While aggregate saving is 3% of personal income in 2022, we find it is negative for the bottom half of the distribution. In fact, expenditures are more than double income for the bottom 10%, but almost six times less than income for the top 1%. Despite a temporary increase in saving during the COVID pandemic, the polarization is large and persistent, and robust to modifying the definitions and sample composition. This paper represents an important step in bridging the gap between micro households and national accounts for saving.