{
  "title": "China: Does Government Health and Education Spending Boost Consumption?",
  "publication": "IMF Working Papers, January 1, 2010",
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  "summary": "Consumption in China is unusually low and has continued to decline as a share of GDP over the past decade. A key policy question is how to reverse this trend, and rebalance growth away from reliance on exports and investment and toward consumption.",
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    {
      "heading": "Summary and research question",
      "content": "- Consumption in China is described as unusually low and has continued to decline as a share of GDP over the past decade.\n- The paper investigates whether the sizable increase in government social spending in recent years lowered precautionary saving and increased consumption.\n- The study focuses on government spending on health and education and its impact on household behavior and aggregate consumption."
    },
    {
      "heading": "Main findings",
      "content": "- Spending on health, but not education, had an impact on household behavior.\n- The impact of government health spending is reported as large:\n  - A one yuan increase in government health spending is associated with a two yuan increase in urban household consumption.\n- Education spending showed no measurable effect on household consumption in the analysis presented."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Increasing government health spending can significantly reduce precautionary saving and boost urban household consumption, suggesting a channel for rebalancing growth away from reliance on exports and investment toward consumption.\n- Education spending, according to the paper's findings, does not appear to have the same effect on household consumption and therefore may not serve the same short-term demand-stimulating role.\n\n---\n\n Content in this bundle\n\n- Wp1016\n  - Wp1016 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp1016 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/china-does-government-health-and-education-spending-boost-consumption-23533"
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    "Authors: Steven A Barnett, R. Brooks",
    "Published: January 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451962130.001",
    "Consumption in China is described as unusually low and has continued to decline as a share of GDP over the past decade.",
    "The paper investigates whether the sizable increase in government social spending in recent years lowered precautionary saving and increased consumption.",
    "The study focuses on government spending on health and education and its impact on household behavior and aggregate consumption.",
    "Spending on health, but not education, had an impact on household behavior.",
    "The impact of government health spending is reported as large:",
    "Education spending showed no measurable effect on household consumption in the analysis presented.",
    "Increasing government health spending can significantly reduce precautionary saving and boost urban household consumption, suggesting a channel for rebalancing growth away from reliance on exports and investment toward consumption.",
    "Education spending, according to the paper's findings, does not appear to have the same effect on household consumption and therefore may not serve the same short-term demand-stimulating role.",
    "**Wp1016**"
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