Contents
I. Introduction .................................................................................................................4
II. Data .............................................................................................................................6
III. Stylized Facts ..............................................................................................................8
IV. Demographic Determinants of Household Saving Behavior......................................9
V. Potential Explanations................................................................................................13
A. Habit Formation ..................................................................................................13
B. Shifts in Social Expenditures ..............................................................................15
C. Durables Purchases and Savings .........................................................................15
D. Housing Purchases and Savings..........................................................................16
E. Effects of State Enterprise Restructuring on Saving Behavior ...........................18
F. Target Savings .....................................................................................................19
V. A Composite Sketch..................................................................................................20
VI. Discussion and Implications for Aggregate Saving Patterns...................................24
Text Tables:
1. Summary Statistics....................................................................................................29
2. Representativeness of 10 Provinces/Municipalities Sub-Sample .............................30
3. Consumption Growth and Habit Formation .............................................................31
4. Ownership of Durable Goods per 100 Urban Households .......................................32
5. Home Purchase and Construction Expenditure Financed by Saving Withdrawals ..33
6. Type of Employer for Households With a Head in the Age Range 25-59 ...............34
7. Median Regressions for the Saving Rate ..................................................................35
8. Median Regressions for the Saving Rate Including Imputed Value of Owner
Occupied Housing.................................................................................................36
Text Figures:
1. Contributions to Gross Domestic Savings as a Percentage of GDP .........................39
2. Saving Rate and Share of Total Savings by Income Quintile...................................39
3. Average Disposable Income and Consumption by Age of Head of Household.......40
4. Income and Consumption for Different Cohorts Over Time....................................41
5. Average Saving Rates by Age of Head of Household..............................................42
6. Age, Cohort, and Year Effects on Income, Consumption and Saving Rates............43
7. Average and Standard Deviation of the Shares of Consumption Expenditure on
Education and Health as a Function of Age of the Head of the Household .........44
8. Home Ownership by Age of the Head of Household ...............................................45
9. Age Distribution of the Chinese Population: Estimates and Projections..................46
3
Appendix...........................................................................................................................26
Appendix Tables:
A1. Saving Rates and Household Income in Household Surveys and
National Accounts................................................................................................37
A2. Breakdown of Consumption Expenditures Across Different Categories ...............38
Appendix Figures:
A1. Aggregate Saving Rate in an OLG Model with Credit Constraints as a
Function of Geometric Growth Rate of Wages ...................................................47
A2. Aggregate Saving Rate in an OLG Model with Credit Constraints as a
Function of Geometric Growth Rate of Wages and the Credit Constraint ...........47
References.........................................................................................................................48