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

Listed author(s):
  • Ayşe İmrohoroğlu

    (University of Southern California)

  • Kai Zhao

    (University of Connecticut)

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.

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File URL: http://web2.uconn.edu/economics/working/2017-17.pdf
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2017-17.

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Length: 55 pages
Date of creation: Aug 2017
Handle: RePEc:uct:uconnp:2017-17
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Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/

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