Oct 16, 2013

The One-Child Policy and Household Savings (China)

Exploiting the birth of twins as an identification strategy, we provide direct empirical evidence on the micro-channel and show its quantitative relevance in accounting for the rise in the household saving rate since the inception of the policy in 1980. Our quantitative OLG model can explain from a third to at most 60% of the rise in aggregate saving rate; equally important is its implied shift in the level and shape of the age-saving profile consistent with micro-level estimates from the data.
That is an excerpt of the abstract of this paper by Taha ChoukhmaneNicholas Coeurdacier, & Keyu Jin

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