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The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics

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  • Ayşe İmrohoroğlu

    (University of Southern California)

  • Kai Zhao

    (University of Connecticut)

Abstract

In this paper, we show that a general equilibrium model that properly captures the risks in old age, the role of family insurance, changes in demographics, and the productivity growth rate is capable of generating changes in the national saving rate in China that mimic the data well. Our findings suggest that the combination of the risks faced by the elderly and the deterioration of family insurance due to the one-child policy may account for approximately half of the increase in the saving rate between 1980 and 2010. Changes in the productivity growth rate account for the fluctuations in the saving rate during this period.

Suggested Citation

  • 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.
  • Handle: RePEc:uct:uconnp:2017-17
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