Saving and bequest in China: An analysis of intergenerational exchange
Almås,Ingvild Freddi,Eleonora Thøgersen,Øystein
Almås,Ingvild
Freddi,Eleonora
Thøgersen,Øystein
Abstract
Particularly high saving rates among the elderly in both rural and urban China call for an investigation of the involved bequest motive. Utilizing unique survey data from a diverse group of Chinese households, we document that the magnitude of the bequest from parent to child is associated with the level of personal assistance from child to parent. Moreover, we find indicative evidence that both bequest and assistance are increasing in the parent's income and decreasing in the child's income. Comparing with the predictions from a stylized intergenerational model, these findings are consistent with an exchange‐based bequest motive. Our findings have potential implications for how public policies and transfer schemes should be designed in order to contribute to the Chinese government objective of increased private consumption. Our results are conditional on the inclusion of housing wealth as part of the bequest, which indicates that transfer of housing is key to understanding the intergenerational assistance and bequest motives, and subsequently the high saving levels among the elderly in China.
Description
Publisher Copyright: © 2019 The London School of Economics and Political Science
Date
2020-01
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Research Projects
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Keywords
SDG 11 - Sustainable Cities and Communities
Citation
Almås, I, Freddi, E & Thøgersen, Ø 2020, 'Saving and bequest in China : An analysis of intergenerational exchange', Economica, vol. 87, no. 345, pp. 249-281. https://doi.org/10.1111/ecca.12303