Shang-Jin Wei

The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China

Coauthor(s): Xiaobo Zhang. View Publication

Abstract:
While the high savings rate in China has global impact, existing explanations are incomplete. This paper proposes a competitive saving motive as a new explanation: as the country experiences a rising sex ratio imbalance, the increased competition in the marriage market has induced the Chinese, especially parents with a son, to postpone consumption in favor of wealth accumulation. The pressure on savings spills over to other households through higher costs of house purchases. Both cross-regional and household-level evidence supports this hypothesis. This factor can potentially account for about half of the actual increase in the household savings rate during 1990–2007.

Source: Journal of Political Economy
Exact Citation:
Wei, Shang-Jin, and Xiaobo Zhang. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China." Journal of Political Economy 119, no. 3 (June 2011): 511-564.
Volume: 119
Number: 3
Pages: 511-564
Date: 6 2011