Sex and the Chinese Savings Rate

http://www.futureofcapitalism.com/2010/05/sex-and-the-chinese-savings-rate

Why do the Chinese save so much? A new paper from the National Bureau of Economic Research by Columbia University's Qingyuan Du and Shang-Jin Wei proposes, as the abstract puts it, "a theory of excess savings based on a major, albeit insufficiently recognized by macroeconomists, transformation in many of these societies, namely, a steady increase in the surplus of men relative to women." The authors write, "We show conditions under which an intensified competition in the marriage market can induce men to raise their savings rate, and produce a rise in the aggregate savings and current account surplus. This effect is economically significant if the biological desire to have a partner of the opposite sex is strong."

They say that the gender imbalance, driven in part by the "one-child" policy, may be responsible for more than half of China's current account imbalance.

by Editor  |  May 24, 2010 at 8:58 am Related Topics:  China, Non-Profits receive the latest by email: subscribe to the free futureofcapitalism.com mailing list