Abstract
We evaluate the extent in which the building savings subsidies, a large spending program of the Czech government, achieves one of its stated goals, i.e., to promote savings of the Czech households. Using household-level survey of investment and saving behavior, we identify households that are apparently unaffected in their level of savings by the building savings subsidies.
At least 44% of the total spending on the subsidy is received by households whose savings are unaffected, and in fact 9.6% of the total spending on the subsidy effectively subsidizes borrowing instead of savings. We identify at most 19% of households whose level of savings may be increased because of the subsidy.
We also evaluate the distributional impacts of the building savings subsidies. They are regressive overall, especially for the poorest quartile of the Czech households.