Saving and Bequest in China: An Analysis of Intergenerational Exchange

43 Pages Posted: 31 May 2016

See all articles by Ingvild Almås

Ingvild Almås

Stockholm University - Institute for International Economic Studies (IIES)

Eleonora Freddi

Stockholm School of Economics

Oystein Thogersen

Norwegian School of Economics (NHH) - Department of Economics

Date Written: May 24, 2016

Abstract

Particularly high saving rates among the elderly in both rural and urban China call for an investigation of the involved bequest motive. Utilizing unique survey data from a diverse group of Chinese households, we document that the magnitude of the bequest from parent to child is synchronized with the level of personal assistance from child to parent. Moreover, both bequest and assistance are increasing in the parent's income and decreasing in the child's income. Comparing with the prediction from a stylized overlapping generations model, these findings are consistent with an exchange-based bequest motive. This conclusion has implications for how public policies and transfer schemes may be designed in order to contribute to the government objective of increased private consumption. Our results indicate that an important driver for our result is the housing wealth as part of the bequest.

Keywords: Bequest, intergenerational exchange, housing wealth, Chinese saving

JEL Classification: D14, D64, E21

Suggested Citation

Almås, Ingvild and Freddi, Eleonora and Thogersen, Oystein, Saving and Bequest in China: An Analysis of Intergenerational Exchange (May 24, 2016). NHH Dept. of Economics Discussion Paper No. 10/2016, Available at SSRN: https://ssrn.com/abstract=2786877 or http://dx.doi.org/10.2139/ssrn.2786877

Ingvild Almås

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

Eleonora Freddi

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Oystein Thogersen (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
92
Abstract Views
821
Rank
503,876
PlumX Metrics