Charles Yuji Horioka, Akiko Terada-Hagiwara, 05 September 2016

China’s one-child policy and a general preference for sons increased competition among grooms, whose families typically bear marriage expenses. This is believed to have increased household saving in the country. This column explores whether the same is observed in other countries with unbalanced sex ratios. Premarital sex ratios are found to have a significant impact on household saving rates in India and Korea, with the direction of the effect dependent on whether the bride’s (India) or groom’s (Korea) family is typically expected to bear the brunt of marriage-related expenses.

Abhijit Banerjee, Xin Meng, Tommaso Porzio, Nancy Qian, 04 September 2014

The loosening of the one-child policy will transform China’s demographic development in coming years, but it also runs the risk of lowering China’s high rate of personal savings. This column argues that high estimates of the magnitude of this response may be overstated. There are multiple channels at play, and predictions of a large response in savings do not account for general equilibrium effects.

Mark Rosenzweig, Junsen Zhang, 21 May 2014

Household savings in China are high by international standards, and the young save as much or more than the middle-aged – a fact at odds with the standard life-cycle savings model. This column argues that neither old-age support by the middle-aged nor the one-child policy can satisfactorily explain this phenomenon. Rather, currently high housing costs and the prevalence of inter-generational shared housing are key reasons for the higher savings rates of the urban young in China.

Taha Choukhmane, Nicolas Coeurdacier , Keyu Jin, 22 January 2014

Since China is growing rapidly, one might expect Chinese households to borrow against their future income. In fact, Chinese households save 30.5% of their income – compared to about 5% in OECD countries. This column discusses recent research linking the Chinese saving puzzle to China’s one-child policy. The savings rate of households with twins is about 6–7 percentage points lower than that of households with an only child. Demographic factors can explain an estimated 35–45% of the 20 percentage-point rise in China’s household saving rate between 1983 and 2011.