Do savings programs dedicated to home-ownership increase personal savings?. An analysis of the West German Bausparkassen system

The West German Bausparkassen system consists of savings and loan institutions providing exclusively to their savers loans towards purchasing a home. Thus, inflows correspond to outflows. We provide an analysis of the impacts of the Bausparkassen system and its governmental subsidization on dedicated and general savings. Within a cross-section microanalysis and a time-series macroanalysis we demonstrate the extent of savings activities in the system and the microstructure of system participation; that government subsidization heavily influences participation, but nevertheless participation also extends to households not eligible for subsidies; and that the very existence of the system contributes to overall savings activities.