Public pension and household saving : evidence from China
Feng, Jin; He, Lixin; Sato, Hiroshi (13.04.2009)
JulkaisusarjaBOFIT Discussion Papers
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201408072159
We relate household saving to pension reform, to explain the high household saving rates in urban China from a new perspective. We use the exogenous - policy induced - variation in pension wealth to explicitly estimate the impact of pension wealth on household saving, and obtain a significant offset effect of pension wealth on household saving. Our estimations show that pension reform boosted the household saving rate in 1999 by about 6 percentage points for cohort aged 25-29 and by about 3 percentage points for cohort aged 50-59. Our results also indicate that declining pension wealth reduces expenditure on education and health more than on other consumption items. Keywords: pensions, pension reform, household savings rate, China JEL: H31, H55, P35
Published in Journal of Comparative Economics, Vol. 39, Iss.4, Dec. 2011, pp. 470-485.