Why are Saving Rates of Urban Households in China Rising?

June 1, 2008

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Format: Chicago

Marcos d Chamon, and Eswar S Prasad. Why are Saving Rates of Urban Households in China Rising?, (USA: International Monetary Fund, 2008) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to ¼ of disposable income. We use household-level data to explain the postponing of consumption despite rapid income growth. Tracing cohorts over time indicates virtually no consumption smoothing over the life cycle. Saving rates have increased across all demographic groups, although the age-profile of savings has an unusual U-shaped pattern, with saving rates being the highest among the youngest and oldest households in recent years. These patterns are best explained by the rising private burden of expenditures on housing, education, and health care.

Subject: Aging, Consumption, Disposable income, Housing, Income

Keywords: Age-saving profile, Household savings, Saving rate, WP

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/145
Stock No:

WPIEA2008145
ISBN:

9781451870039
ISSN:

1018-5941

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