Do the rich save more? Evidence from Brazil

Abstract Are the saving rates of the rich higher than those of the poor? Using Brazilian household expenditure data, we show that the answer depends on how savings are defined. When measuring savings as the difference between income and consumption, saving rates are relatively stable across the income distribution. However, when accounting for human capital investments (such as education and healthcare expenditures), saving rates increase significantly with permanent income. These findings suggest that wealthier households accumulate savings differently, prioritizing human capital as a long-term investment. Our findings highlight the role of public provision quality in shaping saving decisions and provide new insights into the relationship between income and wealth accumulation in developing economies.