IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-137-01204-3_7.html
   My bibliography  Save this book chapter

Understanding China’s Rising Saving Rate: The Role of Higher Education Reform

In: The New Chinese Economy

Author

Listed:
  • Binkai Chen
  • Rudai Yang

Abstract

Substantial empirical studies show that households in China have strong precautionary saving motive; however, few studies explore the microfoundation and underlying reasons accounting for this phenomenon. Comparative analysis of household education expenditure and household consumption behavior before and after the higher education reform suggests that the reform has remarkable impacts on household consumption. Based on the life cycle hypothesis, a theoretical model is constructed with education being introduced in. Simulation results indicate that higher education reform is one of the most important reasons that account for the strong precautionary saving motive and thus the sluggish consumption demand in China. Based on household-level data collected by Chinese Academy of Social Sciences in 1995 and 2002, we test the relationship between the higher education reform and household consumption quantitatively. Cross-sectional regression demonstrates that the higher education reform in 1999 had a significant effect on household consumption. The marginal propensity to consume (MPC) of households with members attaining higher education had decreased by 12 percent from 1995 to 2002.

Suggested Citation

  • Binkai Chen & Rudai Yang, 2012. "Understanding China’s Rising Saving Rate: The Role of Higher Education Reform," Palgrave Macmillan Books, in: Elias C. Grivoyannis (ed.), The New Chinese Economy, chapter 7, pages 137-153, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-01204-3_7
    DOI: 10.1057/9781137012043_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yating Dai & Jian Cheng & Daolin Zhu, 2022. "Understanding the Impact of Land Supply Structure on Low Consumption: Empirical Evidence from China," Land, MDPI, vol. 11(4), pages 1-18, April.
    2. Bollinger, Christopher & Ding, Xiaozhou & Lugauer, Steven, 2022. "The expansion of higher education and household saving in China," China Economic Review, Elsevier, vol. 71(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-137-01204-3_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.