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Is the Age Structure of the Population One of the Determinants of the Household Saving Rate in China? A Spatial Panel Analysis of Provincial Data

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  • Yin, Jingwen
  • Horioka, Charles Yuji

Abstract

In this paper, we use provincial panel data on China for the 2002-19 period to conduct a spatial autocorrelation analysis of household saving rates as well as a dynamic panel analysis of the determinants of household saving rates using a spatial Durbin model. To summarize our main findings, we find that, in China, the household saving rate shows significant positive spatial autocorrelation with an overall "high-high" and "low- low"clustering pattern, that, as predicted by the life-cycle hypothesis, the youth dependency ratio and the old-age dependency ratio have a negative and significant impact on the household saving rate, and that the logarithm of per capita household disposable income, the regional economic growth rate, the share of the urban population, the industrialization rate, and the income disparity between urban and rural areas also have a significant impact on the household saving rate.

Suggested Citation

  • Yin, Jingwen & Horioka, Charles Yuji, 2022. "Is the Age Structure of the Population One of the Determinants of the Household Saving Rate in China? A Spatial Panel Analysis of Provincial Data," AGI Working Paper Series 2022-05, Asian Growth Research Institute.
    • Handle: RePEc:agi:wpaper:00000195
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    References listed on IDEAS

    as
    1. Charles Yuji Horioka & Junmin Wan, 2007. "The Determinants of Household Saving in China: A Dynamic Panel Analysis of Provincial Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(8), pages 2077-2096, December.
    2. Angus Deaton & Christina Paxson, 1997. "The effects of economic and population growth on national saving and inequality," Demography, Springer;Population Association of America (PAA), vol. 34(1), pages 97-114, February.
    3. Ram, Rati, 1982. "Dependency Rates and Aggregate Savings: A New International Cross-Section Study," American Economic Review, American Economic Association, vol. 72(3), pages 537-544, June.
    4. James P. Lesage, 2008. "An Introduction to Spatial Econometrics," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 19-44.
    5. Gupta, Kanhaya L, 1971. "Dependency Rates and Savings Rates: Comment," American Economic Review, American Economic Association, vol. 61(3), pages 469-471, June.
    6. Aart Kraay, 2000. "Household Saving in China," The World Bank Economic Review, World Bank, vol. 14(3), pages 545-570, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    age structure of the population; China; dependency ratio; household saving rate; life-cycle hypothesis or model; old-age dependency ratio; spatial autocorrelation; spatial Durbin model; youth dependency ratio;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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