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16:30 | Macro Research Seminar
Marshall School of Business, University of Southern California, Los Angeles, USA
Authors: Ayşe İmrohoroğlu and Kai Zhao
Abstract: In this paper, we show that a general equilibrium model that properly captures the risks in old age, the role of family insurance, changes in demographics, and the productivity growth rate is capable of generating changes in the national saving rate in China that mimic the data well. Our findings suggest that approximately half of the increase in the saving rate between 1980 and 2010 is a result of the interaction between the decline in the fertility rate due to the one-child policy and the shortcomings of the old-age insurance programs, especially against the long-term care risks, provided by the government in China. Changes in the productivity growth rate account for the fluctuations in the saving rate during this period.
Full Text: “The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics”
