Public Expenditures on Social Programs and Household Consumption in China
AbstractThis paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 1� percentage points of GDP.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 10/69.
Date of creation: 01 Mar 2010
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-CNA-2010-03-28 (China)
- NEP-DEV-2010-03-28 (Development)
- NEP-TRA-2010-03-28 (Transition Economics)
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