The Empirical Study On Household Savings Rate And Its Influencing Factors

Since the reforming and opening, China's economy has maintained a sustained high growth. Social wealth has increased rapidly, Comprehensive national strength has been enhanced greatly, and the living standards of the people have also been improving. However, in the recent years, the domestic effective demand, especially the final consumption demand has always been sluggish, which can be reflected in the decreasing of the final consumption and the increasing of national saving rate. In the situation of the financial crisis, it has appeared to be inadequate to depend on the investment and export to support the economic growth in China. However, the ultimate purpose of economic growth and development is consumption. How to effectively convert the high household savings into consumption, is theoretically and practically significant to reduce the external dependence and economic uncertainty, maintain the economic sustainability, and restructure our country's economy.The transformation of economic growth mode is a key to stimulate domestic demand and increasing domestic consumer demand. While many factors affect the savings rate, the other aspect of this problem is how to reduce the savings rate. Overall, the impact of factors which affect the savings rate in Western economics, are interest rates, income distribution structure, population structure and so on. There are two important factors which could be closely linked with China's household savings rate:one is the growing income gap which was due to the pursuit of economic efficiency in the process of economic reform; the other is changes in population structure which was due to Family planning policy. In theory, the two factors can both explain the high savings rate. In particular, according to the actual data, Gini coefficient which reflects the structure of income distribution, has the same trend with household savings. According to the classical Keynesian theory, when the income gap gradually widening, the savings rate will rise. The demographic structure shows an obvious characteristic of aging, and children in the proportion of the total population decreased year by year.It means that they have the influence on consumption and precautionary savings motives, but the direction of influence may be inconsistent. Then, whether the income gap, the population structure and household savings in China exists the relationship which was revealed in the theory, this article will try to explain it from the theoretical and empirical aspects.This paper includes five chapters:The first chapter is an introduction, including background and significance of the article topic, basic research methods and basic ideas, through the background of China's economic development for the analysis, the weak consumption impediment to economic development. Use of macro-economic development process, analyze the impact of consumption for savings, savings leads to research topics of articles and research significance. Next, the major factors affecting savings in the population structure and income distribution analysis to determine the main research articles, as well as the main research direction and meaning.The second chapter is literature review, including the theory of Western classical review of savings and savings for the Study of the status quo. First, review the theory of Western Savings:over through savings on the analysis, the savings of the new perspective, and in contrast to the classical savings theory; then analyzed the Keynesian theory of savings relative income theory of Francis Smith, leads this Focus the theoretical basis of population; followed by Friedman's permanent income theory and the theory of Modigliani's life-cycle review of factors leads to the theoretical basis of the income distribution; Finally, the summary of the latest theory of savings Research, including the precautionary savings motive, liquidity constraints and buffer stock saving theory. Second, review the status of domestic research, classified according to their theory of life cycle theory, the precautionary savings motive, liquidity constraints about literature review, and the establishment of these theories based on the income gap, research in the field of population structure Review of the literature.The third chapter is theoretical analysis, including the relationship between interest rate and saving the analysis, by the classical economic theory and analysis of modern economic theory come to the savings associated with the relationship between the interest rate, selection of the variable interest rate for the model to provide theoretical support; Second, population structure Analysis of the relationship with the interest rate related to life cycle theory by Modigliani (1970) for the improvement of the life cycle theory, children come to old age dependency ratio and the dependency ratio and the relationship between the savings rate, as a model for these two variables Lay the introduction of theoretical support; again, by reading the literature that the distribution of income based on our relationship with the savings rate the article, through the theoretical analysis of the article to find the income gap and the correlation between the savings rate, income distribution for the model The introduction of variables provides a theoretical support. Finally, the above theoretical analysis to find the theoretical basis for variable selection, the final model to determine the basic form of target selection and related variables.The fourth chapter is an empirical analysis, using time series analysis method, unit root test, cointegration test and error correction analysis, interest rates, child dependency ratio, old age dependency ratio and the Gini coefficient for the savings rate were analyzed to determine Changes in various factors affect the extent of the savings rate, empirical results obtained.The fourth chapter is the Conclusions and recommendations. Through the empirical analysis of the results for the conclusion and propose meaningful recommendations.This paper draws three main conclusions:First, the Gini coefficient is a key variable to explain the high savings rate in China. In the Long-term, the Gini coefficient, together with interest, the elderly dependency ratio, raising children and household savings rates, exists a cointegraion relationship.In the short term, changes in income distribution have a significant, positive effect on household savings rate. This shows that both in the long-term or short-term income distribution have a significant effect on household savings rate. This is consistent with Keynes's theory. Therefore, in the future, how to balance the structure of income distribution, may be the main entry point for stimulating domestic demand.Second, the influence of the interest rate on savings is not significant, the main reasons may lie in the imperfection of China's financial market, and the assets held by residents is still be the form of bank savings, so increasing the interest rates has little effect on the increasing of the saving rate. Third, the demographic impact on the savings rate is significant. Therefore, the accelerated aging process, might not lead to a decline in the savings rate. Increasing in the ratio of elderly population will lead to a decline in the savings rate, but the more obvious bequest motive may bring the increasing of savings. On the other hand, my child dependency ratio showed a declining trend, on the one hand may lead to the corresponding decrease in expenditures, which may lead to the rise in savings rate to a certain extent. However, the level of education spending and the rising cost of living will decline in the savings rate. At the same time, the declining dependency ratio trend of children may lead to the corresponding decrease in expenditures, which may lead to the rise in savings rate to a certain extent, but the rising of education expenditure and living cost will result in the decline of the savings rate.The main features of this article. First, income distribution and population structure will combine the study of the savings rate. The study of income distribution will be the main line, then population of structure will be the expanded study. At last we will analyse their comprehensive impact on the savings rate. Second, during the income distribution variable selection process, we decide to select the Gini coefficient as a representative of income distribution. Finally, the total raising dependency ratio gestures into child-care and elderly dependency. We could respectively describe their impact on the savings rate.