Influence of Socio-economic and Demographics factors on Households’ Savings in Sri Lanka


  • Ruwan Jayathilaka
  • Thisum Palihawadana, Inuri Amalka, Sandupama Jayasinghe and Pulith Jayarathne



The purpose of this paper is to examine the factors influencing saving behavior among households in a developing country. Sri Lanka being a developing country, has recorded a relatively lower households’  saving rate when compared with its peer regional counterparts. The study approximates the socio-economic and demographic factors towards the level of saving of households in Sri Lanka using a quantile regression approach based on the Household Income and Expenditure Survey, conducted by the Department of Census and Statistics of Sri Lanka. Results were obtained by using the stepwise quantile regression technique. The findings of this study conclude that when Sri Lankan households have a higher per-capita income, they tend to have a higher saving level. Moreover, age and marital status have a significant impact on the level of saving in Sri Lankan households. Additionally, poverty and employment status have a significant impact to the level of saving on Sri Lankan households. This research paper bridges empirical gaps in this area of study. Furthermore, this study has been conducted encompassing the entire country rather than limiting it to a district or segment, hence, is comprehensive. As per the generated results gender, income and education levels have shown a significant positive impact towards the level of saving, whilst marital status and poverty have shown a significant negative impact towards the level of saving. It is considered that when the demographic and socio-economic factors are affecting favorably, the level of saving tends to increase and vice versa. Accordingly, findings of the study can provide insights to policymakers to devise policies and incentives to encourage savings behaviour and level of savings among households in Sri Lanka. This is beneficial as coping strategies specially during crises, where dependency of households on government assisted welfare schemes is likely to be less.

Keywords: Household Saving Behaviour, Motives of Savings, Barriers to Saving, Quantile Regression