The Cross-Country Effects of Education Level on Savings Rate

Abstract

This analysis attempts to find the relationship between the education level of the people of a country and the savings rate of the people in a country at the global scale. Previous research has found there to be a positive relationship between education levels and savings rates both across the US and across countries. This study uses both simple and multiple linear regression models to analyze and find the relationship between the two variables to see if those past studies hold up with modern data. Results were mixed as in the simple regression model education was very significant and positive, but in the multiple regression models education became negative when income was considered. There was special consideration as to whether a country was considered developed or developing.