Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Saving and Bequest in China: An Analysis of Intergenerational Exchange.
(), Eleonora Freddi
() and Øystein Thøgersen
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 synchronized with the level of personal assistance from child to
parent. Moreover, both bequest and assistance are increasing in the
parent's income and decreasing in the child's income. Comparing with the
prediction from a stylized overlapping generations model, these ndings are
consistent with an exchange-based bequest motive. This conclusion has
implications for how public policies and transfer schemes may be designed
in order to contribute to the government objective of increased private
consumption. Our results indicate that an important driver for our result
is the housing wealth as part of the bequest.
Keywords: equest; intergenerational exchange; housing wealth; Chinese saving.; (follow links to similar papers)
JEL-Codes: D14; D64; E21; (follow links to similar papers)
38 pages, June 27, 2016
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