Study On The Motivation In Educational Expenditure Of Chinese Households Based On The Theory Of Precautionary Saving

The sustaining trend of descendent household consumption and increased of household savings is a striking economic phenomenon in our country in the last decade, and the other one is that the expenditure in household education is increased year by year. The paper studies and explains those phenomena by the theory of precautionary saving, which helps the government to formulate the effective policies to stimulate consumption, reduce the extraordinary growth of savings and increase the aggregate demands.The precautionary saving theory focuses on studying the influence on the uncertainty to consumption. It is recognized for empirical studies of precautionary saving that the scholar should find observational endogenetic risk for studying objective firstly. The paper combines the current research results of precautionary saving theory in the study of human capital investment to analyze the precautionary motivation in China's household educational expenditure, which is a good angle to study the precautionary savings problem of China. In the section of empirical analysis, the paper takes educational expenditure as instrumental variable (IV) to measure the risk, uses the correlative data in China Statistical Yearbook firstly to estimate the precautionary saving motivation intensity in Chinese urban resident household and rural residents household. Then the correlative data in China Price and Urban Residents household Income and Expenses Investigation Statistical Yearbook is used to estimate the precautionary saving motivation intensity in Chinese urban resident household of various income levers.In conclusion, research results are in the following: 1) Chinese households have strong precautionary saving motivation in general and the educational expenditure is the matter of the phenomenon. 2) The precautionary motivation of urban resident household is stronger than the rural resident household. 3) The precautionary motivation between various income levers of urban resident household is different greatly.