The one-child policy and household saving

Choukhmane, Taha, Coeurdacier, Nicolas and Jin, Keyu ORCID: 0000-0002-0139-799X (2023) The one-child policy and household saving. Journal of the European Economic Association, 21 (3). 987 - 1032. ISSN 1542-4766

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Abstract

We investigate whether the "one-child policy" has contributed to the rise in China's household saving rate and human capital in recent decades. In a life-cycle model with intergenerational transfers and human capital accumulation, fertility restrictions lower expected old-age support coming from children - inducing parents to raise saving and education investment in their offspring. Quantitatively, the policy can account for at least 30% of the rise in aggregate saving. Using the birth of twins under the policy as an empirical out-of-sample check to the theory, we find that quantitative estimates on saving and education decisions line up well with micro-data.

Item Type:	Article
Official URL:	https://academic.oup.com/jeea
Additional Information:	© 2023 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HQ The family. Marriage. Woman
JEL classification:	D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth
Date Deposited:	10 Aug 2023 09:51
Last Modified:	25 Apr 2024 21:54
URI:	http://eprints.lse.ac.uk/id/eprint/119964

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