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Title Essays on China’s Household Saving Rate and Education Policy
URL
Publication Date
Date Accessioned
Degree PhD
Discipline/Department Economics
Degree Level doctoral
University/Publisher Texas A&M University
Abstract This essay contains three essays in applied microeconomics. The first and second paper study the China’s household saving rate and the third studies the economic policy in China. In Volume 119 of the Journal of Political Economy, a paper uses data from the Chinese Household Income Project (CHIP) 2002 and finds that increasingly unbalanced premarital sex ratio raise household saving rate of son-families and the rapid increase in premarital sex ratio can potentially explain about half of China’s household saving rate increasing during 1990-2007. This paper reexamines the competitive saving motive. We first use local sex ratio inferred from 2000 China population census and same dataset CHIP 2002 to find the competitive saving motive only holds for the household in rich counties. We then use data from the China Household Finance Survey (CHFS) to show that competitive holds for the rural sample. The cross-regional evidence indicates that the competitive saving motive exists, but only in the rural area. By estimation and computation, an increase in sex ratio from 1985 to 2015 can explain about 28% of the actual increase of the increase of rural saving rate. The second paper studies the role of income inequality interacting with liquidity constraints in explaining the high household saving rate in China. The predictions implied by a simple lifecycle heterogeneous agent model are consistent with data facts. Using three large nationally representative data sets, China Household Finance Survey (CHFS), China Family Panel Studies (CFPS), and Chinese Household Income Project (CHIP), we find robust evidence that (1) the rich save more; (2) the poor are more likely to face liquidity constraints, and the effect of liquidity constraints on household saving rate is significantly positive; (3) income inequality has a significant positive effect on aggregate household saving rate; and (4) the marginal propensity to consume out of transitory income for poor households is significantly higher than for rich households. Our study provides a policy implication that economic policy of reducing income inequality would lower the aggregate saving rate and thus become a policy of economic transition and growth. The third paper estimates the effect of the "Program of College Admission for Poor Counties" on high school education using data from 86 counties of Gansu province in northwestern China. Applying a difference-in-differences approach, we show that the program significantly increases senior high school entrants by 99-224, and enrollments by 317-586 in per 100,000 population in the poor counties in Gansu after the policy started in 2012. Using the alternative measurement of outcomes, we show that it significantly increases entry rate by 1.3-7.6%, and enrollment rate by 1.2-7.3%. The results are robust to alternative model specifications and outcome measurements. Our findings indicate that this admission policy, which is motivated by addressing unequal access to college, effectively improves schooling at the high school level.
Subjects/Keywords China's household saving rate; sex ratio; competitive saving motive; income equality; liquidity constraints; education Inequality; poverty; college access; high school
Contributors Gan, Li (advisor); Zhang, Yuzhe (advisor); An, Yonghong (committee member); Lindo, Jason (committee member); Mu, Ren (committee member)
Language en
Country of Publication us
Record ID handle:1969.1/173528
Repository tamu
Date Retrieved
Date Indexed 2020-08-12
Grantor Texas A & M University
Issued Date 2018-05-03 00:00:00

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…captured economists’ attention on linking the saving rate to the sex ratio. Can the sex ratio explain high China’s household saving rate? Starting with Wei and Zhang (2011a), they argue a explanation called "competitive saving motive"…

…attempt to replicate and extend the estimates reported in Wei and Zhang (2011a). We use local sex ratio inferred from 2000 China population census and find the competitive saving motive only holds for the household in rich counties. The effects…

…another nationally representative data set China Household Finance 1 Survey (CHFS) 2015 wave for estimating the effect of the sex ratio on the household saving rate. The result indicates that the competitive saving motive still holds, but only…

…Our results report that the competitive saving motive exists, but only in the rural area. By estimation and computation, an increase in sex ratio from 1985 to 2015 can explain about 28% of the actual increase of the increase of rural saving rate. In…

…chapter, we revisit the "competitive saving motive" and answer this question "Can the sex ratio explain high China’s household saving rate today?". The high aggregate household saving rate is one of the unique features of the Chinese…

saving puzzle” is Wei and Zhang (2011a).45 They argue an explanation called "competitive saving motive" that increasingly unbalanced premarital sex ratio require both rural and urban son-families to save increasingly more to ensure the…

…the gender imbalance and the competitive saving motive, starting with Wei and Zhang (2011a), in explaining Chinese household saving rate, we do not expand space to review other important explanations and leave them in a review paper by Yang…

…Zhang, and Zhou (2012). 2 4 half of the sharp increase in China’s household saving rate. Why competitive saving motive needs this replication In fact, birth and premarital sex ratio imbalance both rural and urban is still important in…

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