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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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Identification Number: 10.1093/jeea/jvad001


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:
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: 16 Jun 2024 22:15

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