The Determinants Of Household Saving In China: An Empirical Analysis Of Micro Household Data

During the 21 st century, China’s high savings rate problems have become more prominent. Almost all related research and data show that in the process of economic development, China’s savings rate is higher than that of most countries and regions in the world. The characteristics of high savings and low consumption led to Chinese long-term economic growth being driven by investment and exports, which not only increases the inherent instability of economic operation, but also may bring a series of problems. Therefore, China’s savings rate, especially as far as household savings are concerned, has been beneath the attention of domestic and foreign academic circles in recent years. Furthermore, factors that influence the of high savings rate have become a hot issue of research.Based on the lifecycle hypothesis, permanent income hypothesis, and precautionary savings theory, and combined with the realistic background of the transition economy, this paper analyzes the determinants of the household savings rate in China. Selecting the CHFS data, this paper uses the methods of OLS, FGLS, and Quintile Regression, as well as the relative importance method to make the empirical test. There are some results related to the empirical test of micro data, and finally this paper puts forward some relevant policy suggestions. The main conclusions of this paper are as follows. First, income is an important factor affecting the savings rate in China. Second, wealth level of household has a significant negative impact on savings rate. Third, social security also has an important influence on household savings rate. Finally, the population age structure’s overall impact on China’s household savings rate is relatively weak. By analyzing the relative importance of factors, this paper finds that, among above influencing factors, income uncertainty is the most important factor affecting savings rate.