This study employs panel data estimation models to investigate the determinants of household savings in South Africa
over the period 2008 – 2012. The novelty of some panel data models is their power to overcome the problems of
endogeneity bias, in addition to controlling for unobserved heterogeneity across households. The study used the three
waves of the new unique and rich first national representative longitudinal survey, the National Income Dynamics
Study (NIDS), which tracks changes in individuals’ livelihoods over time. The distinctiveness of NIDS data is that it
is available in a panel format and can be used to investigate the structure and impact of different aspects of socioeconomic
factors on household savings. The results of this study reveal that household savings in South Africa are
strongly driven by income, age structure, education achievement and employment status. Yet the causal nexus between
savings and the household size was found to be negative, a sign that larger families compromise households savings
prospects.