5
is overfunding and the provisions have been made more stringent
recently (Munnel 1987).In fact the employers contributions have
declined absolutely from 1981 to 1987 by almost $10 billion;since
they would normally be expected to rise roughly in the same
proportion as the national wage bill we should have expected the
contributions to be $ 90 billion instead of 50 billion in 1987 so
that they have relatively speaking declined by $40 billion.
A.Munnel gives an estimate of $30 billion up to 1980 (Munnel
1987). This caused a corresponding decline in personal saving as
shown by NIPA. If we add to this the spurious decline on account
of the excess of benefits over investment income (see above) we
get $ 60 to 75 billion which corresponds to about 2 to 2.5 per
cent of disposable income.To this extent the reduction in the
saving ratio is thus explained by factors which have nothing to do
with the propensity to save in the accustomed sense. On the face
of it you would say that the reduction in contributions has
shifted saving from the household to the corporate sector. But the
point is really that the whole change has been caused by the
overfunding of the pension funds whose realised capital gains have
been shifted to the corporation in form of reduced
contributions.The question may be left open what the corporation
does with it:Whether they keep it,or pay it out as dividends which
partly becomes consumption,or whether they pass it on in form of
reduced prices (with constant mark up,in Kaleckian fashion) which
leads to increased consumption ultimately financed by the capital
gains.The genuine saving is therefore considerably higher than an
uncritical interpretation of the saving ratio would make it
appear.
The preceding analysis deals only with the financial saving of
households. It is of interest to find that also the data on saving