RIEB Discussion Paper Series No.2022-05

Title

Is the Age Structure of the Population One of the Determinants of the Household Saving Rate in China? A Spatial Panel Analysis of Provincial Data

Abstract

In this paper, we use provincial panel data on China for the 2002-19 period to conduct a spatial autocorrelation analysis of household saving rates as well as a dynamic panel analysis of the determinants of household saving rates using a spatial Durbin model. To summarize our main findings, we find that, in China, the household saving rate shows significant positive spatial autocorrelation with an overall "high-high" and "low-low" clustering pattern, that, as predicted by the life-cycle hypothesis, the youth dependency ratio and the old-age dependency ratio have a negative and significant impact on the household saving rate, and that the logarithm of per capita household disposable income, the regional economic growth rate, the share of the urban population, the industrialization rate, and the income disparity between urban and rural areas also have a significant impact on the household saving rate.

Keywords

Age structure of the population; China; Dependency ratio; Household saving rate; Life-cycle hypothesis or model; Old-age dependency ratio; Spatial autocorrelation; Spatial Durbin model; Youth dependency ratio

JEL Classification

D14, D15, E21, G51, J11, O16, R20

Inquiries

Jingwen YIN
Graduate School of Economics, Kobe University

Charles Yuji HORIOKA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Asian Growth Research Institute
Institute of Social and Economic Research, Osaka University
Institute of Economic Research, Kyoto University
National Bureau of Economic Research