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Population Policies, Demographic Structural Changes, and the Chinese Household Saving Puzzle

Author

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  • Ge, Suqin

    () (Virginia Tech)

  • Yang, Dennis T.

    () (University of Virginia)

  • Zhang, Junsen

    () (Chinese University of Hong Kong)

Abstract

Using combined data from population censuses and Urban Household Surveys, we study the effects of demographic structural changes on the rise in household saving in China. Variations in fines across provinces on 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 a reduced number of adult children save more because of old-age security concerns, middle-aged households experience an increase in saving due to the lighter burden of dependent children, and younger households save more because of having fewer siblings to share the responsibility of parental care. 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 T. & Zhang, Junsen, 2012. "Population Policies, Demographic Structural Changes, and the Chinese Household Saving Puzzle," IZA Discussion Papers 7026, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7026
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    Cited by:

    1. Zhou, Weina, 2014. "Brothers, household financial markets and savings rate in China," Journal of Development Economics, Elsevier, vol. 111(C), pages 34-47.
    2. 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.
    3. Zsofia Barany & Nicolas Coeurdacier & Stéphane Guibaud, 2015. "Fertility, Longevity and International Capital Flows," Sciences Po publications info:hdl:2441/5402sfihji9, Sciences Po.
    4. Ayşe İmrohoroğlu & Kai Zhao, 2017. "The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics," Working papers 2017-17, University of Connecticut, Department of Economics.
    5. Nicolas Coeurdacier, 2016. "Fertility, Longevity, and Capital Flows," 2016 Meeting Papers 442, Society for Economic Dynamics.
    6. repec:taf:ceasxx:v:67:y:2015:i:9:p:1351-1370 is not listed on IDEAS

    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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