Research On The Impact Of Rising Housing Prices On The Household Savings Rate Of Rural Migrants

The problem of low consumption and high savings of Chinese residents has been around for a long time,and it has become an important problem restricting China’s economic transformation and upgrading.Since 1978,China’s industrialization and urbanization process gradually accelerated,and the transfer of rural labor to cities has become one of the significant features of China’s economy.The continuous expansion of the floating population has made this group grow rapidly into the third pole of residential structure,independent of urban and rural residents.Rural migrants are not only the main labor suppliers in urban areas,but also important consumer groups.However,in the face of rising housing prices year after year,migrants have to devote more time to labor and minimize leisure time to smooth future consumption.They show a lower willingness to stay in cities for a long time,and the semi-citizen state makes them have a strong precautionary saving motivation,and the savings rate is much higher than that of urban and rural residents.It is of great practical significance to explore the causes behind the high savings of rural migrants and release the consumption potential of floating population for improving the current situation of insufficient domestic demand and high savings of residents.This study uses the classic consumption savings theory to analyze the mechanism of housing prices affecting the household savings rate.By scouring the pertinent literature,this study determines the precise effect channels that have an impact on the link between the two.This is also the premise of the study hypothesis presented.Then,using the CMDS from 2016 to 2017,as well as the CEIC China Economic Database,China Urban Statistical Yearbook,and China Land and Resources Statistical Yearbook data,we conducted an empirical test to explore the impact of rising house prices on the rural migrants’ household savings rate from the perspectives of urban residence intention and family members’ labor participation,it provides a new explanation for the causes behind the high savings behavior of rural migrants.This paper finds that the rise in housing prices has a significant positive impact on the rural migrant household savings rate.After solving the endogenous problem using the instrumental variable method,replacing the housing price measurement indicators,conducting sub sample regression and changing the definition of savings rate,the results are still stable.Then,this paper establishes a causal relationship identification mechanism between housing prices and household savings rate through residence intention and labor participation.The results show that rising housing prices will lead to an increase in household savings rate by reducing the willingness to stay in the city for a long time and increasing the labor participation probability of family members,especially those who move with married women.In addition,the heterogeneity analysis results show that the household savings rate of low-income,older generation and rural floating population who have only received compulsory education,plan to flow to other cities or return home in the future,and have no intention of settling down are more sensitive to the rise of house prices.This paper also finds that the positive impact of rising house prices on the household savings rate is more obvious in the western and northeast regions.Further discussion found that the increase in the threshold for settling down would weaken the impact of rising house prices on household savings rate,but could not completely offset this positive impact.Eventually,the relevant policy suggestions are made in light of the empirical findings of this study:(1)We should formulate reasonable housing price control policies,speed up the improvement of the housing rental market,control the housing price and rent within a reasonable range,and reduce the housing burden of families.(2)We should accelerate the reform of the registered residence system,establish a social security system that integrates urban and rural areas,and improve the willingness of rural migrants to stay in cities.(3)We should strengthen vocational education and skill training,and improve the competitiveness of rural migrant population in the labor market and the ability to resist uncertainty risks.(4)We should promote the strategy of coordinated regional development,narrow the gap between backward and developed regions,and solve the problem of unbalanced regional development.