Work

Saving puzzle: Head of household's prior childhood rural experience and saving decision

Year: 2025

Type: article

Abstract: We examine the impact of a head of household's prior childhood rural experience on its saving decision. Using the household responses from the longitudinal survey data from the China Family Panel Studies (CFPS) during 2010–2018 to study the relationship in China. Our findings suggest that when a head of household has prior childhood rural experience, the household has a higher saving rate than one without such experience. The results are economically significant. Depending on specific models and after accounting for other factors, when a head of household has prior childhood rural experience, the household's saving rate is 3.56–5.06 percent points higher than one without prior rural experience. The findings are robust to propensity score matching (PSM) sample, Tobit estimation, and after accounting for financial literacy of the head of household. Additional analysis suggests that the effect is more salient when the household has a high expectation for his or her child's future education, a high child-bearing desire, or a low investment risk tolerance.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.103986

Authors: Jianning Wang, Cheng Zhang, Haodong Chang

Institutions: China University of Labor Relations, Renmin University of China, Shantou University, Zhongnan University of Economics and Law

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: No poverty

Open Access status: gold

Estimated APC paid: $1,930