Summary. - What goes steady with private savings? This paper investigates reasons for the sustained
growth in private savings in Indonesia since 1970, in a period characterized by economic growth,
demographic changes, terms of trade movements, and financial liberalization. The main finding is that
predictions from a simple life cycle model do well inasmuch as the growth in private savings rates is
associated with a drop in the dependency ratio. This suggests that a reduction in the number of children
relative to working age population has alleviated household budget constraints, thereby boosting savings
rates. 0 1998 Elsevier Science Ltd. All rights reserved
Key words - Southeast Asia, Indonesia, private savings, dependency ratio, life cycle model