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Micro-Data Evidence on Family Size and Chinese Saving Rates

Author

Listed:
  • Steven Lugauer

    (Department of Economics, University of Notre Dame)

  • Jinlan Ni

    (University of Nebraska at Omaha)

  • Zhichao Yin

    (Southwestern University of Finance and Economics)

Abstract
This paper examines the impact of family size on household saving. We first study a theoretical life-cycle model that includes finite lifetimes and saving for retirement and in which parents care about the consumption of their dependent children. The model implies a negative relationship between the number of dependent children in the family and the household’s saving rate. Then, we test the model’s implications using a new data set on household finances in China. We use the differential enforcement of the one-child policy across counties to address the endogeneity between household saving and fertility decisions within a standard two-stage least squares Tobit regression. We find that Chinese families with fewer dependent children have significantly higher saving rates. The regressions also indicate that saving rates vary with age and tend to be higher for households with more workers, higher education, better health, and more assets.

Suggested Citation

  • Steven Lugauer & Jinlan Ni & Zhichao Yin, 2014. "Micro-Data Evidence on Family Size and Chinese Saving Rates," Working Papers 023, University of Notre Dame, Department of Economics, revised Jun 2014.
    • Handle: RePEc:nod:wpaper:023
    as

    Download full text from publisher

    File URL: http://www3.nd.edu/~tjohns20/RePEc/deendus/wpaper/023_Chinese_Saving.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
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    Cited by:

    1. Qing Zhao & Zhen Li & Taichang Chen, 2016. "The Impact of Public Pension on Household Consumption: Evidence from China’s Survey Data," Sustainability, MDPI, vol. 8(9), pages 1-15, September.

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    More about this item

    Keywords

    China; Household Saving; Demographics; Overlapping Generations;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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