HOUSEHOLD SAVING IN FRANCE - STOCHASTIC INCOME AND FINANCIAL DEREGULATION

The household saving ratio in France underwent sharp changes over the past two decades, falling dramatically in the early 1980s before rising more recently. This paper emphasizes two factors in the evolution of private saving in France. The first relates to perceptions of household income growth and uncertainty, which have likely been affected by deteriorating labor market conditions and may therefore help account for the recent increase in saving. The second relates to financial deregulation, which may have lowered saving and increased its sensitivity to interest rate changes. Both have played some role in the evolution of French household saving.