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

48 Pages Posted: 9 Dec 2012

See all articles by Suqin Ge

Suqin Ge

Virginia Tech - Department of Economics

Dennis Tao Yang

Chinese University of Hong Kong - Department of Economics

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics; IZA Institute of Labor Economics

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.

Keywords: household saving, one-child policy, demographic structure, cohort analysis, China

JEL Classification: E21, J11, J13

Suggested Citation

Ge, Suqin and Yang, Dennis Tao and Zhang, Junsen, Population Policies, Demographic Structural Changes, and the Chinese Household Saving Puzzle. IZA Discussion Paper No. 7026. Available at SSRN: https://ssrn.com/abstract=2186804

Suqin Ge (Contact Author)

Virginia Tech - Department of Economics ( email )

Department of Economics
Virginia Tech
Blacksburg, VA 24061
United States

Dennis Tao Yang

Chinese University of Hong Kong - Department of Economics ( email )

Shatin N.T.
Hong Kong
Hong Kong

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong
852-2609-8186 (Phone)
852-2603-5805 (Fax)

HOME PAGE: http://www.cuhk.edu.hk/eco/staff/jszhang/jzhang.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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