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any excess of contributions paid to government to support social security schemes over the benefits received for them is not regarded as household saving. To estimate the impact of different pension arrangements, transactions relating to private pension schemes can be recorded in a similar fashion to those relating to social security schemes. Consequently, hypothetically adjusted household saving ratios can be derived by subtracting the net change in equity of households in pension funds from both household saving and disposable income. The differences between these ratios and the standardised ratios in Chart 2 are shown in Table 3.

The simulated adjustments to the household saving ratios are particularly significant for the United States (ranging from 3.5 to 6.2 percentage points) in view of its extensive use of privately organised pension schemes for the provision of retirement income. A contributing factor to the smaller adjustments for the United States in the latter part of the decade is that employer contributions to defined benefit schemes were reduced because of the extent of property income and capital gains earned by these funds during the stock market boom of the 1990s.

Euro area

United States

Japan

1991

-0.9

-5.8

-1.2

1992

-0.9

-5.4

-1.1

1993

-0.8

-6.2

-1.1

1994

-0.9

-5.8

-1.0

1995

-0.9

-3.9

-1.0

1996

-0.8

-3.5

-1.0

1997

-0.8

-4.6

-0.9

1998

-0.9

-4.3

-1.0

1999

-0.9

-3.6

-0.8

2000

-1.0

-3.7

-0.8

2001

-0.9

-4.1

-0.7

2002

-1.0

-3.7

-0.4

Table 3. Changes from standardised household saving ratios: social security schemes versus private pension schemes (percentage points)

Sources: OECD, National Accounts of OECD Countries database, 2004 and national statistical agencies

5

Chart 3. Comparison of standardised HSRs and adjusted HSRs

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









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Sources: OECD, National Accounts of OECD Countries database, 2004; National statistical agencies

For the euro area and Japan, the adjustments have been around one percentage point for most years over the last decade.

Household saving ratios after a hypothetical adjustment for the three institutional factors

Chart 3 shows the net effect of making the three hypothetical adjustments simultaneously for: (1) household consumption of public services; (2) income taxes versus taxes on production and imports; and (3) social security schemes versus private pension schemes. The net effect of these adjustments is to increase the difference between the euro area household saving ratios and those for Japan (marginally) and for the United States (significantly).

Other factors affecting the comparability of household saving ratios

In addition to the factors arising from different institutional arrangements, there are a number of other

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