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Population policies, demographic structural changes, and the Chinese household saving puzzle

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  • Ge, Suqin
  • Yang, Dennis Tao
  • Zhang, Junsen

Abstract

Using combined data from population censuses and Urban Household Surveys, we study the effects of demographic structural changes on the rise of household savings in China. Variations in fines across provinces for unauthorized births under the one-child policy and in cohort-specific fertility influenced by the implementation of population control policies are exploited to facilitate identification. We find evidence that older households with fewer adult children saved more, middle-aged households with fewer dependent children experienced increase in savings, and younger households with fewer siblings also saved more. These findings lend support to a simple economic model in which the effects of population control policies are investigated in the context of household saving decisions in China.

Suggested Citation

  • Ge, Suqin & Yang, Dennis Tao & Zhang, Junsen, 2018. "Population policies, demographic structural changes, and the Chinese household saving puzzle," European Economic Review, Elsevier, vol. 101(C), pages 181-209.
  • Handle: RePEc:eee:eecrev:v:101:y:2018:i:c:p:181-209
    DOI: 10.1016/j.euroecorev.2017.09.008
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    Cited by:

    1. Zsofia Barany & Nicolas Coeurdacier & Stéphane Guibaud, 2015. "Fertility, Longevity and International Capital Flows," Sciences Po publications info:hdl:2441/5402sfihji9, Sciences Po.
    2. Chadwick C. Curtis & Steven Lugauer & Nelson C. Mark, 2015. "Demographic Patterns and Household Saving in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 58-94, April.
    3. İmrohoroğlu, Ayşe & Zhao, Kai, 2018. "The chinese saving rate: Long-term care risks, family insurance, and demographics," Journal of Monetary Economics, Elsevier, vol. 96(C), pages 33-52.
    4. Nicolas Coeurdacier, 2016. "Fertility, Longevity, and Capital Flows," 2016 Meeting Papers 442, Society for Economic Dynamics.
    5. Chen, Yi & Huang, Yingfei, 2018. "The Power of the Government: China's Family Planning Leading. Group and the Fertility Decline since 1970," GLO Discussion Paper Series 204, Global Labor Organization (GLO).
    6. repec:taf:ceasxx:v:67:y:2015:i:9:p:1351-1370 is not listed on IDEAS
    7. Zhou, Weina, 2014. "Brothers, household financial markets and savings rate in China," Journal of Development Economics, Elsevier, vol. 111(C), pages 34-47.
    8. Abid Hussain & Golam Rasul & Bidhubhusan Mahapatra & Sabarnee Tuladhar, 2016. "Household food security in the face of climate change in the Hindu-Kush Himalayan region," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(5), pages 921-937, October.

    More about this item

    Keywords

    Household saving; One-child policy; Demographic structure; Cohort analysis; China;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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