The 20th annual Symposium will be held on Thursday, April 23, 2009.

Factors of China’s Rapid National Saving Growth
Norris 102, 3:00 PM

Yang  Chen,   '11 54
   Major: Economics
   Hometown: Wuhan, China

Sponsor(s): Kotaro Yoshida
Support: FURSCA

Abstract: 
Over the past five years, the Chinese national saving rate has experienced a significant increase from 40.0% in 2004 to 50.0% in 2008. Why do the Chinese save so much? Why have they increased their savings even further in recent years? By asking questionnaires to Chinese households and conducting statistical analysis on the obtained data, I try to answer these questions and explore the factors that affect the national saving rate.

In a field trip to China in summer 2008, I surveyed 300 Households, collected 220 questionnaires, and compiled data. Then I ran a regression with saving rate as the dependent variable on annual after-tax family income, size of family, number of dependents, education level and majors and other factors as independent variables.

Preliminary findings are as follows. Annual after-tax income, family size, and the number of dependents negatively affect the saving rate. The first result is consistent with a conjecture that those who have higher income have higher expected income and thus less need to save today. The second and third are consistent with the fact a bigger fraction of income has to be spent when family size is bigger and that, when dependents are children, such tendency may be magnified due to rising education costs in recent years.

 54