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This book has three parts: scientific background, design, and results. We begin by describing the intellectual background of the SAVE survey and the strategic selections of topics to be covered. The second part is devoted to the design of SAVE: the often unpleasant choices between the researchers’ desire to measure everything and the respondents’ tiredness to answer very personal questions. Details are relegated to a technical appendix. The third part is the longest and delivers an overview of the central results drawn from the SAVE panel: How Germans save, and how this has changed from 2001 through 2007.

Demographic change presents major financing problems for the pay-as-you-go pension system. In response to these problems, the 2001 and 2004 German pension reforms reduced the statutory level of benefits from the pay-as-you system. The resulting pension gap is supposed to be filled by funded second and third pillar private pensions. This paper examines the extent to which households are in a position today to close this gap with their personal assets, assuming that they stick to their current saving and asset accumulation behaviour. Four critical factors are relevant to this issue: 1. the anticipated life expectancy, 2. the level of personal assets on retirement 3. the expected age of retirement, and 4. the anticipated interest rate. Our results indicate that about a third of German households will not be able to fill the pension gap unless they were to change their current savings behaviour.

This paper presents selected highlights drawn from the German SAVE surveys in 2001 and 2003, expanding the findings of Börsch-Supan and Essig (2003) along three lines. First, it analyses the households' assessment of their general, economic and financial well-being in the past, present and future. Second, it reports findings for the respondents' information level on, and expectations about, the public pension system. Third, it presents answers to a newly developed set of questions about risk. Specifically, it tests the reliability of the experimental question design and links self-assessed risk to respondents' financial behavior.

The literature on precautionary saving provides contradictory views on the importance of precautionary saving. The SAVE data offer the possibility to generate some of the frequently used instruments known from the literature in order to measure the extent of precautionary savings. This paper compares the influence of these instruments on long-run and short-run saving measures. In addition, SAVE contains information on a broad range of saving motives. This paper uses these short-run and long-run savings motives to describe differences in savings, saving rates and wealth accumulation.

We analyze nonresponse to questions on financial items such as income and asset holdings in the SAVE survey, exploiting a controlled field experiment. As part of the SAVE study, a representative survey conducted in Germany in 2001, questions on household income and financial assets were administered using different interview modes (personal interview vs. drop-off questionnaire). The data also allow investigating the influence of interviewer characteristics on nonresponse. Our results are in line with predictions derived from models of survey response behavior that have been developed in survey research and social psychology.

General purpose surveys typically refrain from using an exhaustive list of consumption expenditure items since the gain of more precise data on consumption is usually more than offset by the large increase in interview time and respondent effort which reduces response willingness. An alter¬native is to ask respondents a non-exhaustive list of consumption expenditure items and use those items to impute total consumption by the use of an external data source. This paper uses the SAVE (internal) and EVS (external) data sets to apply such a procedure.

This paper describes the general design of the SAVE survey: the design of the questionnaire, inter-viewer and interviewee motivation, and the sampling designs of the various subsamples collected in 2001 and 2003. It discusses the representativeness of the data, explains the construction of weights, and provides probit regressions to analyse potential selectivity problems. The paper finishes by discussing implications for the use of the SAVE data in various estimation procedures.

Saving is frequently measured using a one-shot question for total annual saving during the preceding year. This type of one-shot recall question might cause severe measurement errors since saving is a complicated concept which consists of various components, many of which respondents might not be fully aware of. This paper uses the SAVE data to analyze potential errors generated by this kind of questioning and provides remedies in order to construct the most of reliable saving measure given the information at hand.

Demographic change confronts the German Pay-As-You-Go pension system with serious problems. For this reason, reductions in the level of public pensions were adopted under the pension reform in 2001, which also strengthened significantly the funded second and third pillars of old-age provision. The introduction of the supplementary pension provision brings with itself two major risks we are going to analyse in the present paper. One risk is implied by the voluntariness of supplementary arrangements. There is uncertainty over whether households � in particular the less affluent ones � will show the willingness and/or the capability to accumulate supplementary savings for their old age consistently. A further risk for supplementary old-age provision - which could as well be seen as a chance � rests in the return on contributions. Critics of funded private retirement provision often point at the return risk, in particular against the backdrop of the recent developments on capital markets. This paper asks whether under these risks, households will be able to close the gap arising from a reduction of public pension levels and to which degree there is scope for temporary suspensions of contributions to supplementary schemes.

This paper presents selected highlights drawn from the German SAVE surveys in 2001 and 2003, expanding the findings of Börsch-Supan and Essig (2003) along three lines. First, it analyses the households' assessment of their general, economic and financial well-being in the past, present and future. Second, it reports findings for the respondents' information level on, and expectations about, the public pension system. Third, it presents answers to a newly developed set of questions about risk. Specifically, it tests the reliability of the experimental question design and links self-assessed risk to respondents' financial behavior.

General purpose surveys typically refrain from using an exhaustive list of consumption expenditure items since the gain of more precise data on consumption is usually more than offset by the large increase in interview time and respondent effort which reduces response willingness. An alter¬native is to ask respondents a non-exhaustive list of consumption expenditure items and use those items to impute total consumption by the use of an external data source. This paper uses the SAVE (internal) and EVS (external) data sets to apply such a procedure.

The literature on precautionary saving provides contradictory views on the importance of precautionary saving. The SAVE data offer the possibility to generate some of the frequently used instruments known from the literature in order to measure the extent of precautionary savings. This paper compares the influence of these instruments on long-run and short-run saving measures. In addition, SAVE contains information on a broad range of saving motives. This paper uses these short-run and long-run savings motives to describe differences in savings, saving rates and wealth accumulation.

The purpose of this dissertation is to contribute to the understanding of households' saving behavior. Savings and savings behavior was subject to large and comprehensive research, and still, the complexity of households' savings behavior is not completely understood. To understand saving, it therefore helps to be open for economic as well as psychological and sociological explanations. Germany, in particular, is an interesting country to study saving, especially among older households. Even though the pension and health insurance system in Germany is one of the most generous systems in the world, private savings are high until old age. Until recently, there has been a lack of data that records detailed information on savings in Germany in conjunction with sociological and psychological characteristics. This dissertation builds on the newly established SAVE data set which started in 2001. It contains seven chapters with both, methodological and substantive aspects.

Germany is not a country of stock-holders - but this may change. This paper analyses the main trends in stockholding - either directly or indirectly through mutual funds and other managed investment accounts - among German households. We find a significant shift towards riskier portfolios and an increase in stock market and in mutual funds participation in the past decade. We document how stockownership evolves during the life cycle and the relation between stock market participation and wealth, education, and other demographic characteristics. Similar to other countries, we find that stockholding is concentrated among the wealthy households. Unlike to the Anglo-Saxon countries, however, the share of households who do not hold stocks is large even in the richest segment of the German population.