Nordic Statistical Meeting 26.-28.8.2019, Helsinki

1. Saving and investments in the private sector
10/18/2019 Erik Fjærli, Statistics Norway 1

2. Motivation: Peculiar patterns in national accounts data: What
on earth is going on?
10/18/2019 2
-20000
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Household saving=Disposable income minus consumption
Disposable income - Consumption =Saving? Capital income, largely dividends

3. Outline
• Why bother?
• How we obtained our results
• Some empirical results
• Implications & conclusions
10/18/2019 3

4. Why?
• Strange and unbelievable savings patterns in official statistics call for
investigation
• The drivers behind these patterns are distributions from non-financial
corporations to owner-managers. Our findings is related to Corporate
net lending - a widespread phenomenon that calls for attention (cf
OECD, IMF, academic journals – big concern & worry)
• Business assets & business income is relevant for the measurement
and analysis of inequality
10/18/2019 4

5. How?
• We use microdata for non-financial corporations linked with
household data (using ownership data)
• We compare net lending and investments in directly owned
enterprises vs enterprises owned by other enterprises (i.e., directly vs
indirectly owned firms)
• We examine the distribution of capital accumulation that takes place
in the corporate sector by wealth-class of owners
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6. National accounts: Household saving is strongly related to
capital income
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-20,0
0,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Capital income and household saving. Nominal bill.NOK
Capital income Saving

7. Corporate saving and household saving are inversely correlated
10/18/2019 7
-150
-100
-50
0
50
100
150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Annual change in household and corporate saving. Nominal bill. NOK
Non-financial corporations Households
-200
-150
-100
-50
0
50
100
150
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Household and corporate saving: Direction of change (“2.derivative”)
Non-financial corporations Households

8. Corporate net lending: The non-financial corporate
sector is heterogenous
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-100 %
-80 %
-60 %
-40 %
-20 %
0 %
20 %
40 %
60 %
80 %
100 %
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Investments vs net lending. Direct ownership
Net lending Direct ownership Investments Direct ownership
-80 %
-60 %
-40 %
-20 %
0 %
20 %
40 %
60 %
80 %
100 %
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Investments vs net lending. Indirect ownership
Net lending Indirect ownership Investments Indirect ownership

9. Business owners stand for most of private saving
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-20,00
-10,00
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
90,00
All Top 5% Top 1% Top 0,1% Top 1000 Top 100
Households' share of corporate saving in 2004 and 2005. Nominal bill. NOK. By percentile
Corp. Saving 2005 Corp. Saving 2004 Change in corp saving

10. Conclusions
• «Non-financial» enterprise is a difficult and perhaps meaningless concept
• Conserning business expansion, acquisition of other firms (a sort of
«financiation») may have replaced investments in fixed assets
• Saving by the rich through holding companies or directly owned parent
companies may explain the tendency to positive corporate net lending
• (Changes in) household or corporate saving alone provide incomplete
information unless viewed together
• Taking corporate saving (and net lending) into account, private saving is
extremely concentrated among the rich. If self-propelled, inequality will
continue to increase
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11. Thank you!
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