The one child policy and savings in China

Stream: Chinese social policy: families and children
Date: Tuesday, 10 September 2019
Time: 1.35 pm – 3.15 pm

Abstract

One of the key sources of Chinese economic growth has been the abundance of household savings. In 2014, China’s household savings rate was 37.99%, which is among the top 5 percent of countries. There’s a vast literature trying to explain this high savings rate relative to other countries, with one possible explanation being China’s one child policy. The impact of the one child policy on the savings rate can come through two channels. First, it can affect the number of children born. But less children doesn’t necessarily mean one will save more. Indeed, rather than spending money on extra children, one could spend money on other consumables or spend more money per child raised. That is, the one child policy also could affect how children and savings are related (i.e. the coefficient of the number of children in a regression of savings on children).

In this paper, we contribute to this debate on the impact of the one child policy on China’s savings rate by merging the data from the Global Findex Survey and the Gallup World Poll, which allows us to evaluate the impact of having children on people’s saving decision and saving motives for 148 countries worldwide. Overall, our results suggest that, while the one child policy might have affected the number of children, in terms of the effect of children on savings, China is not that different from the rest of the world.

Authors

Zhongchen Song (Presenter), University of Canterbury
I'm a PhD student in Economics at the University of Canterbury, under the supervision of Professor Bob Reed and Associate Professor Tom Coupe. I have a background in Mathematics and Economics

Tom Coupe, University of Canterbury
Tom Coupé is an Associate Professor of Economics at the University of Canterbury, New Zealand.

Bob Reed, University of Canterbury
Bob Reed received his Ph.D. from Northwestern University in 1985. He is currently Professor of Economics at the University of Canterbury in New Zealand. He has taught at Texas A&M University, the University of Texas at Austin, and the University of Oklahoma. Professor Reed has published in the areas of labor economics, public choice, public finance, and applied econometric. His work has appeared in numerous professional journals, , including the Journal of Political Economy, Journal of Public Economics, Journal of Labor Economics, Journal of Urban Economics, Journal of Human Resources, Oxford Bulletin of Economics & Statistics, Economic Inquiry.