Savings Rate and Its Determinants in Households in Poland

Purpose: The primary objective of the research was to diagnose the level of the savings rate generated by households in Poland from 2018 to 2022 and to identify its demographic and socio-economic determinants. The study considered key factors influencing the savings rate, such as disposable household income, household size, the education and age of the household head, and place of residence. Additionally, the research attempted to determine the extent to which demographic and social determinants modified the effect of income on the savings rate. Design/Methodology/Approach: The study drew on unpublished microdata from the Household Budget Surveys (HBS) conducted between 2018 and 2022 by the Central Statistical Office (CSO) in Warsaw, Poland. Representative samples included approximately 30,000 households each year, totaling around 150,000 over the entire period. The savings rate in Polish households was analyzed in groups distinguished by various demographic and socio-economic determinants adopted as the grouping criteria. To identify statistically significant determinants of the savings rate, a robust regression model was estimated for quantitative, binary, and categorical explanatory variables. This model also included interactions between socio-demographic variables and income. Findings: The pandemic period significantly increased the household savings rate. In the year of the outbreak, its growth was about six times higher than in the previous year. The slight decrease after the easing of restrictions in 2021 suggests that the 2020 growth was only partly forced and largely driven by precautionary motives. The research confirmed that household income was the primary determinant of savings rates, with its influence growing during the pandemic. Higher age of the household head and education beyond the basic level weakened this influence. Moreover, an increase in household size before the pandemic weakened income's effect on saving propensity, while during the pandemic, it strengthened it. Practical Implications: Diagnosing household saving propensity and its determinants is vital for assessing both household and national economic growth. Household savings are a key source of financial capital, driving economic growth and providing protection against financial shocks. This research highlights the pandemic's impact on savings behavior and underscores the need for strategies to mitigate such effects in the future. Governments and financial institutions can use these insights to manage economic stability, while educational programs can emphasize the importance of savings. Additionally, households can make more informed financial decisions by understanding the factors influencing their savings behavior. Originality/Value: The value added of the research lies in the use of a robust regression model for quantitative, binary, and categorical explanatory variables to measure their influence on the savings rate. Moreover, the research drew on large databases of over 150,000 records.