TY  - RPRT
        AU  - Chamon, Marcos
AU  - Liu, Kai
AU  - Prasad, Eswar
        TI  - Income Uncertainty and Household Savings in China
        PY  - 2010/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5331
        UR  - https://www.iza.org/index.php/publications/dp5331
        AB  - China's household saving rate has increased markedly since the mid-1990s and the age-saving profile has become U-shaped. Using a panel of urban Chinese households covering 1989-2006, we document a sharp increase in income uncertainty. While the permanent variance of household income was stable, the transitory variance rose sharply. Based on these estimates, we calibrate a buffer-stock savings model and show that rising income uncertainty and pension reforms lead younger and older households, respectively, to raise their saving rates. These two factors account for over half of the increase in China's urban household savings rate and the U-shaped age-profile of savings.
        KW  - household savings
KW  - income uncertainty
KW  - pension reforms
KW  - buffer-stock savings
KW  - China
        ER  -