How much you save may be influenced by your grandparents' place of birth
UK-born grandchildren of immigrants tend to mirror the money-saving behaviour of their grandparents' country of birth, according to new research from the London School of Economics.
The study is the first of its kind to find a link between culture and saving behaviour. The researchers used information from Understanding Society to explore the saving habits of UK migrants, their children and their grandchildren.
They found that despite living in different economic conditions, such as a different tax and welfare system, to their country of birth, money-saving behaviour still tended to reflect that of their birth country. For example, the UK-born children and grandchildren of people born in countries where people have high rates of saving - such as China - tended to save at a higher rate. The researchers suggest that this is because different cultures place different levels of importance on saving which leads to ingrained saving behaviour. This continues to influence people's behaviour outside of their birth country.
These behaviours are passed down the generations through what the researchers call 'intergenerational cultural transmission' - where parents pass their beliefs and values on to their children.
Researcher Dr Berkay Ozcan from the London School of Economics explained why this matters, "This study is important because it contributes to understanding the determinants of saving behaviour. Social scientists have been trying to understand determinants of saving behaviour in order to design various policies, such as retirement and pension policies, which are aimed at increasing savings. Our research shows that culture is an important determinant and should be taken into account when designing incentives and policies for saving behaviour."