Economists spent most of the 1980s trying to explain the decline in personal and national saving. They have supplied a host of possibilities, including the impact of capital gains, a decline in the need for retirement saving, and the impact of slower income growth, among others. None of these candidates, however, provides a convincing explanation for the apparent changing pattern of personal thrift.

Two potential culprits have received considerably less attention and most probably have played major roles in the decline in the reported personal saving rate: the appreciation of owner-occupied housing in the late 1960s and 1970s, and the funding limitations faced by private pension plans in the 1980s. This article presents an empirical analysis of the extent to which the housing boom and pension funding provisions determined the pattern of saving in the postwar period.