Household Savings Rate Research Articles

From restriction to relaxation: the impact of fertility policy on household savings across countries

This paper presents a quantitative assessment of the impact of fertility policy adjustments on household saving rates using a panel data policy evaluation approach. We examine seven Asian regions that initially implemented restrictive fertility policies and later relaxed them, providing a unique empirical context for understanding the economic impact of such policy shifts. The analysis indicates that early restrictive fertility policies had a significant impact on the household saving rate, resulting in increases ranging from 4 to 21 percent across countries. However, the subsequent relaxation of these policies had mostly insignificant effects on household savings rates, with the exception of Japan. Specifically, the implementation of fertility restriction policies in China, Hong Kong (China), Malaysia, and Singapore is associated with a 4-10 percent increase in the household saving rate. In Korea, these policies lead to an increase of 18.3 percent, and in Iran, the effect is most pronounced, with a 21 percent increase in the household saving rate. In contrast, the relaxation of family planning policies in Japan resulted in a 6.4 percent decrease in the household savings rate. These results provide new quantitative evidence on the impact of fertility on household saving rates, support the life-cycle theory of saving, and provide explanations for the differential impact of such policy adjustments.

Analysis Of the Impact of China's Population Age Structure on Residential Commercial Housing Prices

With the intensification of global aging, the impact of changes in population age structure on the real estate market is becoming increasingly significant. This article aims to explore the impact of changes in China's population age structure on the prices of residential commercial housing, to provide a scientific basis for regulating the real estate market. By analyzing data from 30 provinces and cities in China from 2013 to 2022, this article finds that as aging population intensifies and the number of children decreases, both the old-age dependency ratio and the child-age dependency ratio have a negative impact on housing prices. This means that the aging society and the economic pressure of childcare may weaken the demand for home purchases. Household Saving Rate and increase in total population positively drive house prices, while the relationship between per capita income and house prices is not significant. From a regional perspective, the aging population in the eastern region has a significant effect on suppressing housing prices, while the impact is gradually evident in the central region. The western region has a smaller impact and population growth suppresses housing price increases. The study emphasizes the impact of changes in the age structure of the Chinese population on the prices of residential properties and proposes policy recommendations such as improving old-age security and optimizing the housing supply structure to promote the steady development of the real estate market.

Physical activity, screening cancer, and savings rate as indicators of health responsibility

Introduction: The health of individuals can change gradually over time as a result of the choices they make. Aim: The study aimed to examine indicators such as physical activity levels, screening participation, and household savings in the context of their role as potential measures of individual health responsibility. The second aim was to identify cognitive barriers and motivations influencing physical activity, breast and cervical cancer screening participation, and money-saving habits. Material and methods: The analysis used available data on physical activity, the screening level (for breast and cervical cancer), and household savings rates. Then, the data for Poland were presented against the background of available averages for the European Union. The data came from Eurostat, Eurobarometer - the official survey instrument used by the European Parliament. Results: According to Eurobarometer data, 65% of respondents in Poland have never been physically active in 2022 (vs in the European Union 45%). In 2022, the percentage of women who were screened for cervical cancer in Poland was 34% of women. And the cervical cancer program (cytology) was used by 10.9% of people. In 2022, the household saving rate was 12.7 % in the EU, and in Poland -2.89%, where the lowest rate occurred in Greece and the highest in Germany (Eurostat data). Conclusion: The low level of physical activity and participation in screening tests in Poland, compared to EU countries, highlights the need to intensify public health promotion activities. Additionally, promoting saving as an important element of health responsibility can not only improve the financial well-being of citizens but also have a positive impact on their mental health.

Air pollution and the mystery of high household savings in China

Despite consumption being a key measure of residential welfare, the relationship of the residential savings rates, an inverse proxy for household consumption, with air pollution is unclear. This study empirically examines the impact of air pollution on household savings rates, and the underlying mechanism. The results reveal that worsening air pollution significantly increases household savings rates; this finding holds under alternative variable specifications and employing instrumental variables to address endogeneity issues. The mechanism analysis demonstrates that air pollution enhances household savings rates through health risks. Heterogeneity analysis indicates that in developed areas with more comprehensive public medical service systems, the positive effect of air pollution on household savings rates weakens in second-tier cities and above as well as in high-income areas. Furthermore, improvements in commercial insurance coverage mitigates the positive effect of air pollution on household savings rates. Overall, this study explains the high savings phenomenon among Chinese households from an environmental perspective. The Chinese government should encourage the use of renewable energy, improve air pollution control, and reduce the inhibitory effects of air pollution on residential consumption.

Personal income tax reform and household savings rates: Evidence from a quasi-natural experiment in China

This study examines the effects of the 2018 personal income tax reform on household savings rates using data from the China Household Finance Survey (CHFS). Employing a quasi-natural experiment approach, our findings demonstrate that the reform has led to an increase in savings rates among Chinese households. Mechanism tests indicate that income uncertainty serves as the underlying mechanism linking the personal income tax reform to household savings rates. Heterogeneity analyses reveal that the impact of the personal income tax reform on household savings rates is particularly pronounced for households with lower income and those whose heads have lower levels of education. Additionally, the personal income tax reform has elevated the proportion of household development and enjoyment consumption in total consumption. This study provides a novel micro-perspective on the influence of Chinese fiscal policies on residents' saving behavior and offers valuable insights for promoting high-quality consumption and fostering high-quality economic development.

The Correlation Between the Willingness to Marry and the Household Savings Rate in China

In recent years, the decrease in household savings rate and willingness to marry is an important problem facing society in China. The traditional competitive savings theory holds that the imbalance of the male and female sex ratio is an important factor affecting the household savings rate. However, in the context of the saving rate declining year by year after 2010, it is found that the traditional competitive savings theory can not fully explain the reasons for its decline. At the same time, according to the data statistics, it is found that the trend of marriage intention in China during 2000-2021 is similar to that of the savings rate, which increases first and then decreases. Therefore, this paper established a multiple linear regression model and ridge regression model for regression analysis, and observed the size of the regression coefficient and the positive and negative effects of willingness to marry on household savings rate in China. The regression results show that for every 1% change in willingness to marry, the savings rate will change 13.526% in the same direction on average. This indicates that the decline in willingness to marry plays a positive role in explaining the decline of household savings rate.

Urban–Rural heterogeneity in the effect of population ageing on the savings rate of urban and rural households in China

As the second populous country in the world, China is confronted with the significant and rapid challenge of population ageing. The household savings rate is inevitably impacted by population ageing. Most existing research has been conducted using macro data from 31 provinces in China. However, most of them lacks consideration of urban-rural differences. Furthermore, there are concerns regarding the applicability of using macro data to study household-level microeconomic issues. Against this backdrop, the objectives of this paper are twofold: first, to investigate the effect of population ageing on the savings rates of urban and rural households in China. Second, this work examines whether urban–rural heterogeneity is evident in the impact of population ageing on household savings in China. This paper conducts a regression analysis on pseudo-panel data from 2010 to 2018 in China using micro-level household data from China Family Panel Studies and employing a Feasible Generalized Least Squares model. The key contribution of this paper is converting cross-sectional microdata into pseudo-panel data, enabling regression analysis within a logical and rigorous theoretical framework. It addresses limitations on existing literature, which predominantly relies on macro data. Additionally, the study takes into account heterogeneity, individual differences, and multicollinearity in regression model selection, thereby remedying the shortcomings of model selection in the majority of the existing literature based on pseudo-panel data. The findings reveal the heterogeneity of household savings rates in urban and rural China, as well as the heterogeneity of the impact of population ageing on the savings rates of urban and rural households in China. Specifically, population ageing significantly reduces household savings rates in both China and rural areas, but significantly increases the savings rates of urban households. Moreover, in the context of population ageing, urban household savings rates are significantly lower than those in rural areas. Policymakers should strengthen urbanization efforts to reduce the urban-rural disparity. In addition, to mitigate the impact of population ageing on savings rates, policymakers should encourage fertility in order to improve household demographics. They should also strengthen investment in education to reduce the burden of household expenditure on education. In addition, policymakers should promote entrepreneurship, provide job training in order to increase household incomes.

The impact of the investment expectation gap on households’ risky financial asset investment

Rational household asset allocation is crucial for the accumulation of household wealth. However, there is still a widespread phenomenon of limited participation among households. This paper aims to explore the impact of the investment expectation gap on households’ risky financial asset investment. Utilizing data from the China Household Finance Survey 2019, this paper systematically investigates the role of the investment expectation gap in risky financial asset investment through the Probit and Tobit models. The study reveals that the investment expectation gap has a significant negative impact on the investment probability (Average Marginal Effect, –0.118, p < 0.01) and holding proportion (β, –0.082, p < 0.01) of household investment in risky financial assets. This conclusion remains robust after conducting robustness tests by replacing the explanatory variable and performing subsample tests and endogenous treatment. The analysis of transmission mechanisms revealed that an expanding of the investment expectation gap would concurrently result in a decline in households’ assessment of stock’s profitability (Average Marginal Effect, –0.080, p < 0.01), the satisfaction with current asset allocation (β, –0.167, p < 0.05), and the subjective well-being of household members (β, –0.289, p < 0.01). Furthermore, the investment expectation gap not only hampers household investment in risky financial asset, but also diminish the household savings rate (β, –0.055, p < 0.01). This study demonstrates that helping households form reasonable expectations for risky financial assets investment returns will contribute to diversifying household asset allocation and enhancing satisfaction with investment decisions. AcknowledgmentThis study is funded by the Chongqing Social Science Planning Fund, grant number (2021BS052).

Key Drivers of Economic Growth in Portugal and the Eurozone

This paper examines the influence of gross household disposable income, tax burden, and savings rates on economic growth in Portugal, providing a comparative analysis with the Euro Zone. Drawing on empirical data from 2000 to 2022, the study employs Pearson correlations, regression models, and ARIMA forecasts to analyse the relationships among these variables. The findings indicate a significant positive correlation between disposable income and economic growth, while Portugal's higher tax burden has a more pronounced negative impact on growth than the Euro Zone. Additionally, the research highlights the critical role of savings rates in driving economic growth, particularly in Portugal, where lower savings rates are partly attributable to the financial system's development. The results suggest that policies aimed at increasing disposable income, reducing the tax burden, and fostering savings could substantially boost economic growth in Portugal, offering insights into the broader determinants of growth in developed economies.

How Does the Ageing Population Affect China’s Household Savings Rate? Empirical Study Based on China’s Micro Household Data

The impact of the ageing population on China’s economy and society is multifaceted, with the impact on household savings rates being particularly important. This study investigates the influence of population ageing on household savings rates, utilizing data obtained from the China Household Finance Survey (CHFS) spanning the period from 2015 to 2019. The study found that ageing has a significant negative effect on household savings rates. This finding suggests that there is a significant life-cycle effect on changes in household savings rates in China, which is not conducive to the formation of a second demographic dividend. From the perspective of mediating variables, population ageing growth reduces household income, thereby further decreasing the household savings rate, with income reduction being the main factor causing the decline in the household savings rate. Additionally, it has been found that the impact of population ageing on the household savings rate exhibits significant heterogeneity between urban and rural areas. The increasing proportion of the elderly population in rural areas has a stronger negative effect on the household savings rate.

Study on the influence of Internet finance on urban household savings rate: Evidence from China

This study aims to investigate the impact of Internet finance on the urban household savings rate. We constructed a theoretical model to depict the mechanism of how Internet finance influences urban household savings rates. For empirical analysis, we use the cross-sectional data from the China Household Finance Survey (CHFS) and conduct ERM to attain the extent to which Internet finance affects savings rates. The results show that the behavior of urban households participating in Internet finance has a significantly reduced effect on the urban household savings rate. In addition, the results of heterogeneity analysis show that the effect of Internet finance on the savings rate for urban households with a low level of assets and income is stronger and more significant, which has strong political implications. The results also show that households with older average age are not significantly affected by Internet finance, which reveals the possible limitations. This study provides a theoretical model to reveal the mechanism of how Internet finance reduces household savings rate and uses empirical analysis to measure the marginal influence of Internet finance on urban household savings rate, as well as offers suggestions for better development of Internet finance.

Long-term economic impact of disasters: Evidence from multiple earthquakes in China

This paper examines the short-term and long-term economic impacts of relative-ly small but more frequent earthquakes in China. Using a difference-in-differences approach based on prefecture-level city panel data, combined with a unique data set on seismic events in China, we find that both moderate and strong earthquakes significantly decrease affected prefectures’ GDP per capita in the long run. These effects vary depending on the level of local government fiscal autonomy, social capital intensity, and infrastructure development. We also find that three mechanisms contribute to long-term negative effects: the household savings rate, fixed asset investment, and innovation. Our results provide new insights for policymakers to address relatively small disasters, which can have a significant impact on the local economy in the long run.

Do women's working hours inputs yield higher household economic welfare than men's?

Time allocation, which encompasses various aspects of the labor market and the household sphere, is a key factor affecting both genders in the employment and household spheres. Using the data from China Family Panel Studies Survey (CFPS) of 2014, 2016 and 2018, the paper examines the impact of working hours input on household economic welfare. The research results indicate that women's working hours input significantly contributes to the household economy and passes a series of robustness tests; the positive effect of women's working hours input on the household economy is stronger than that of men using the household savings rate to measure household economic welfare; and there are increasing working hours input and enhancing household economic welfare through the mechanism of increasing household income. Theoretically, time allocation is placed within the logical framework of the household microcosm. It suggests that individual working hours influence household economic welfare. Practically, the research findings provide useful policy insights: raising workers' wage levels, narrowing the gender labor gap, and improving working time systems and work arrangements to promote the equal development of both genders in the employment and household spheres.

The link between household savings rates and GDP: evidence from the Visegrád group

ABSTRACT During the past two decades, two global events highlighted the importance of household savings to economies and individuals, and their relation to economic activity and growth. First, the Global Financial Crisis of 2008 reminded the world that household savings are essential for economic recovery and sustainable economic development. Second, the recent COVID-19 pandemic showed how vulnerable household savings are to various external shocks. This paper investigates the relationship between household savings rates and real GDP in the four countries of the Visegrád Group, namely the Czech Republic, Hungary, Poland, and Slovakia, for the period 1996–2021. Our empirical analyses indicate short-run Granger causality from real GDP to household savings rates, and from household savings rates to real GDP, in both the Czech Republic and Hungary. Additionally, we also report significant long-run relationships between household savings rates and real GDP, particularly in Hungary .

External Factors Influencing on the Development of Mutual Funds in Kazakhstan

This study explores the potential for the development of mutual funds in Kazakhstan by analyzing external factors such as regulatory policies, market conditions, and geopolitical events. The increasing household savings rate in Kazakhstan and growing foreign investment in mutual funds suggest a positive outlook for the industry. The aim of this study is to explore and analyze the external factors influencing the development of mutual funds in Kazakhstan and their potential implications for investors and the broader financial market. Additionally, the study aims to investigate the factors that influence investors' behavior in selecting mutual funds over other investment vehicles such as bank deposits. The study also seeks to develop and test hypotheses regarding the impact of external factors, such as time horizon, investment knowledge, and risk capacity, on the development of mutual funds in Kazakhstan. The research is based on a survey of professionals from the finance and banking industry in Kazakhstan, and the results indicate that consistent past performance, size of funds, and cost of transaction are the most important factors for mutual fund selection. The study concludes that the growth in mutual funds in Kazakhstan presents significant opportunities for investors, fund managers, and policymakers, but also highlights the need for continued research into the factors influencing mutual fund performance.

Determinants of household savings rates: Logistic quantile regression approach

Saving rates have a fundamental economic importance that affects the economic performance of countries and the welfare level of individuals. Savings have been addressed in various ways with alternative economic approaches. The determinants of household savings rates were examined at the level of quantiles in this study. For this purpose, the logistic quantile regression approach proposed for bounded dependent variables was used. Since savings rates have a bounded and continuous structure, it is appropriate to analyze them with this method. Income level has been considered the principal determinant of savings rates and the change in the effect of income on savings rate at the level of quantiles was examined in details. As a result of the analysis performed separately for homeowners and tenants, it was determined that there were differences between the two groups. The change in the income effect was non-linear at the quantile level in both groups. While income was more effective at high savings rates for homeowners, it was more effective at low savings rates for tenants. On the other hand, the effects of other characteristics of the households also differed between the homeowners and the tenants at the level of the quantiles.

Household Savings and Negative Interest Rates

This paper analyses determinants of household savings in a model based on an extension of the disequilibrium savings theory. These extensions follow from the life-cycle, permanent-income and Ricardian-equivalence theories. Based on panel data of 20 countries from the period 2000–2020, fixed-effect least squares estimation procedures are used. The analysis provides evidence that negative interest rates lead to a statistically and economic significant increase in savings. This implies that stimulating household consumption with a monetary policy of negative interest rates is counter-productive. The positive effect of income uncertainty and lagged saving rates gets smaller for negative interest rates, weakening the support for the disequilibrium-savings theory. Larger government deficits increase savings even more when rates are negative, strengthening the Ricardian equivalence effect. The effect of negative interest on the predictions of the life-cycle and permanent-income theories is mixed.

Research on the influence mechanism of child dependency ratio on household saving rate

High family savings rate has always been an important feature of China's economy. With the gradual opening of China's birth policy, the high family savings rate is closely related to children's dependency ratio. Based on the data of CFPS in 2018, the regression results show that: first, the child dependency ratio enhances the precautionary savings of families and increases the household savings rate; Second, generational care makes the parents' lasting income more stable, so under the condition of the same child support ratio, households with generational care have a lower savings rate; Third, the ratio of child dependency in eastern and western families has a significant positive effect on saving rate, while the central region has no significant effect. Finally, it puts forward some suggestions on strengthening social security, advocating intergenerational care and narrowing the gap between East and west China.

Income growth, income uncertainty, and urban–rural household savings rate in China

Chinese urban and rural household savings rates each demonstrated prominent changes over the course of 1995–2007. Specifically, the average urban household savings rate witnessed a boom, while its rural counterpart experienced the dramatic opposite. The evolving income shocks and income levels are promising candidates to account for the patterns observed in empirical data. I then consider a buffer-stock life-cycle savings model that is separately adapted to the two segments of households. By disciplining the model with realistic income parameters, and allowing the model to track changes in income shocks and income growth rate over time, the factors concerned can produce nearly half of the increase in urban household savings rate, and more than two-thirds of the decrease in rural household savings rate. I attribute the increase in urban savings rate to agents’ precautionary reactions to the intensified income shocks and the reduced pension replacement ratio. Rural household savings rate, on the other hand, appears to be depressed by the lower permanent shocks to income.

Does the Fisher effect hold in Rwanda?

The Fisher hypothesis suggests a one-to-one link between nominal interest rate and expected inflation. The indication is that interest rate is independent of expected inflation. This paper empirically examines the Fisher effect in Rwanda using data from 2012m5 to 2020m2. We employ the Autoregressive Distributed Lag (ARDL) technique for data analysis. We find evidence of partial Fisher effect in Rwanda during the period. This indicates that changes in expected inflation are not fully absorbed in the nominal interest rate which suggests that bank deposits decline over time. Also, the findings suggest that monetary policy may not be efficient in such a circumstance and household’s savings rate may suffer a decrease. Besides, the short-run results show no Fisher effect between nominal interest rate and expected inflation. This calls for great attention while fixing interest rate as a tool for monetary policy.