Measuring Savings

Development depends on saving. But what exactly is saving, and how is it measured? This paper defines saving and describes several measures of financial savings in the context of Individual Development Accounts, a new policy idea that provides matches for poor people who save for home purchase, post secondary education, and microenterprise. The proposed measures of savings take into account the passage of time and the three stages of saving: putting in (depositing), keeping in (maintaining a balance), and taking out (withdrawing). Together, the measures help describe how people move financial resources through time.