A Study On The Impact Of "Comprehensive Two-child" Policy On Household Saving Behavior

Since the reform and opening up,the phenomenon of high savings of Chinese households has become a social topic and has attracted widespread attention from scholars at home and abroad.The high savings provided a large amount of capital for banks in the initial stage of China’s economic development,but gradually evolved into the undesirable situation of "high savings and low consumption" at the end of last century,which seriously restricted the growth of domestic demand in China.Studies have shown that the intergenerational structural changes in households due to low birth rate levels are one of the main reasons for high saving behavior.China’s family planning policy,which has been implemented gradually since 1970,has gone through a process of "loosening and then tightening" to "gradual liberalization",which raises an important question:will the continuous relaxation of China’s population policy reduce the household saving rate?This paper selects the quasi-natural experiment of the "comprehensive two-child"policy,which was officially implemented in 2016,to explore the changes in household saving behavior after the implementation of the policy.Using data from the 2012,2014,2016,and 2018 China Household Tracking Surveys(CFPS),the policy effect is assessed using the causal inference method-PSM-DID;heterogeneity is analyzed in terms of the gender of the first-born child and household income;and heterogeneity is analyzed through six major household expenditure categories:food,medical care,daily necessities,clothing,housing,and transportation.The channels of policy effects on the saving behavior of residential households are analyzed through six major categories of household expenditures:food,medical care,daily necessities,clothing,housing,and transportation and communication.The main findings are as follows:First,the reverse incentive effect of the "two-child policy" on household saving behavior in rural areas is not significant,while the short-term effect of reducing the saving rate in urban areas is very significant,with a significant decrease of 3.43%in the saving rate of households in the treatment group(policy-applicable)compared to households in the control group(policy-non-applicable).Subsequent validity tests also confirm the existence of this policy effect;Second,heterogeneity analysis of the policy effect from different perspectives reveals that the decrease in savings rate is more significant for households with first-born girls and low-income households,which is in line with the traditional ideology that Chinese households value sons over daughters and the expected impact of income on household fertility decisions.Third,the impact channel of the policy effect is found that the impact of the "comprehensive two-child" policy on urban households’ saving behavior is mainly realized through three consumption channels: household food,health care,and daily necessities expenditures.In addition,after adjusting the definition of "control group" in the rural sample and changing the upper age limit of suitable families in the urban sample,the results show that the estimated policy effects of the "comprehensive two-child" policy on households’ saving behavior remain robust.