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Do Migrants Really Save More? Understanding the Impact of Remittances on Savings in Rural China

  • Yu Zhu

    ()

  • Zhongmin Wu
  • Meiyan Wang
  • Yang Du
  • Fang Cai

This paper studies the impact of remittances on the savings behaviour of rural households in China, using a cross-sectional survey. Allowing for endogeneity and left-censoring of remittances, we find that the marginal propensity to save out of remittances is well below half of that out of other sources of incomes. Moreover, we find no evidence of any direct effect of remittances on either capital input or gross output of farm production. These findings are in line with recent studies which conclude that remittances are largely used for consumption purposes by rural Chinese households and there is no link between migration and productive investment.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/0923.pdf
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Paper provided by School of Economics, University of Kent in its series Studies in Economics with number 0923.

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Date of creation: Dec 2009
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Handle: RePEc:ukc:ukcedp:0923
Contact details of provider: Postal: School of Economics, University of Kent, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/

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