The aim of this paper is to shed some light in the decline in personal saving rates in the United States in the 1980s. For a such a purpose the paper analyses the only U.S. data set containing information on consumption and income at the household level: the Consumer Expenditure Surveys (CEX) from 1980 to 1991. Because the CEX is not a panel, most of the analysis is conducted using average cohort techniques. The paper identifies a "typical age profile" for saving rates. Such a profile is "hump shaped" and peaks around age 57. The paper also argues that such a profile was "shifted down"for the cohorts born between 1920 and 1939 relative to the younger and older cohorts considered. These cohorts are the parents of the baby boom generation. The paper also argues that these "cohort effects" can account for a nonneglible proportion of the decline in aggregate saving because these cohorts were, during the 1980s, in the ages when saving rates are typically highest. The result is robust to the consideration of several controls and holds for several definitions of consumption. The only exception is when durable expenditure is considered as saving rather than consumption.

Orazio P. Attanasio is a professor of economics at University College London, a senior researcher at the Institute for Fiscal Studies and a Faculty Research Fellow at the National Bureau for Economic Research. He would like thank the editor and two anonymous referees for helpful comments. He would also like to thank Richard Blundell, Tom MaCurdy, Costas Meghir, Gugliemo Weber, and Frank Wolak for many useful discussions. The usual disclaimer applies. The data used in this article can be obtained beginning November 1998 through October 2001 from the author, Department of Economics, University College London, Gower Street, London WC1E 6BT, United Kingdom.