|
|
|
| Rising Labor Income and the Evolution of the National Savings Rate in China |
| YANG Tianyu, ZHU Guang
|
| School of Applied Economics, Renmin University of China |
|
|
|
Abstract Since 2008, China's national savings rate has shown a fluctuating and declining trend, which should be taken seriously. High savings rates have some negative effects, but lower savings rates are not always better. During the past 40 years of the reform and opening up, a high savings rate has been the cornerstone of China's economic development. Without a certain savings rate, it is difficult to support the growth of bank credit and investment. In addition, a high savings rate serves as a margin of safety should China's overall debt ratio increase. If the savings rate continues to decline, it will inevitably cause a debt repayment burden and increase the vulnerability of the financial system. Although China's savings rate remains high, it is important for the smooth transformation of China's economy to understand the reasons for the decline in the savings rate, especially whether the decline is sustainable, and to propose forward-looking policies.
Many studies offer explanations for the increase in China's savings rate before 2008, among which the theory of distributive pattern, the theory of population structure, the theory of an imperfect economic system, the theory of cultural habits, and the theory of income inequality have great influence, but these theories do not explain the decline in China's savings rate after 2008. This paper tries to explain the declining trend of China's national savings rate since 2008 from the perspective of rising labor income. Data from flow of funds statements show that the rise in labor income has significantly affected China's national savings rate since 2008. As a result, we propose the labor income hypothesis to explain the evolution of the national savings rate. We hypothesize that the continued decline in the national savings rate since 2008 is driven by residents' increasing labor income. Specifically, due to the reduction in the surplus labor force and policy factors that are beneficial to workers, the certainty and predictability of rising labor income in China are increasingly strong, which enhances consumption and leads to a decline in the household savings rate. Increasing labor income means greater labor costs for enterprises, which leads to a decrease in their disposable income and a decrease in the corporate savings rate. An increase in labor expenses for enterprises leads to an increase in social welfare and public service expenditures by the government, which forces a decline in disposable income and government savings, thus leading to a decline in the government savings rate. Therefore, the decline in China's national savings rate is caused by the combined declines of the savings rates of residents, enterprises and the government caused by rising labor income, rather than by the sum of the savings rates of certain sectors.
To test this hypothesis, we conduct an empirical analysis with the minimum wage standard as the instrumental variable and using provincial panel data from 2008 to 2016. The results show that many variables mentioned in the literature fail to explain the changes in the savings rate since 2008. Some explanatory variables show a significant positive correlation with the savings rate, which is consistent with the expectations of the previously mentioned theories, but this positive correlation is not enough to increase the savings rate. For example, the coefficient of the government investment rate is significant and positive, indicating that the distribution pattern theory has some explanatory power for changes in the savings rate, but it is not sufficient to cause an increase in the government and national savings rates. In contrast, the continued rise in per capita labor income has a significant negative effect on the savings rate. In other words, increasing labor income offsets the positive effects of other factors on the savings rate and dominates the downward trend of the national savings rate, indicating that the labor income hypothesis has quite strong explanatory power for the savings rate.
Based on our theoretical hypothesis and empirical evidence, there is room for further decline in China's national savings rate. This has significant implications for the choice of macroeconomic policy. China is still a developing country, so to achieve our many economic and social goals, we need a high rate of economic growth, which objectively requires that a certain rate of investment be maintained. If the national savings rate continues to fall without a corresponding decline in the investment rate, there will be a negative gap between the savings and investment rates. According to the balance of payments, this will lead to a persistent trade deficit, which could lead to serious financial risks. To offset the pressure of economic growth brought by a decline in the savings rate, China's economic growth pattern should be transformed from investment-driven to consumption-driven, and the focus of policies to stabilize growth should be transformed from investment amount to investment efficiency.
|
|
Received: 25 October 2019
Published: 02 December 2020
|
|
|
|
|
| [1] |
陈斌开, 2012,《收入分配与中国居民消费—理论和基于中国的实证研究》,《南开经济研究》第1期,第33～49页。
|
| [2] |
陈斌开、陈琳和谭安邦, 2014,《理解中国消费不足:基于文献的评述》,《世界经济》第7期,第3～22页。
|
| [3] |
陈彦斌、郭豫媚和姚一旻, 2014, 《人口老龄化对中国高储蓄的影响》,《金融研究》第1期,第71～84页。
|
| [4] |
方福前, 2009,《中国居民消费需求不足原因研究—基于城乡分省数据》,《中国社会科学》第2期,第68～82页。
|
| [5] |
甘犁、赵乃宝和孙永智, 2018,《收入不平等、流动性约束与中国家庭储蓄率》,《经济研究》第12期,第34～50页。
|
| [6] |
李稻葵、刘霖林和王红领, 2009,《GDP中劳动份额演变的U型规律》,《经济研究》第1期,第70～82页。
|
| [7] |
李扬和殷剑峰, 2007,《中国高储蓄率问题探究—1992-2003年中国资金流量表分析》,《经济研究》第6期,第14～26页。
|
| [8] |
刘生龙、胡鞍钢和郎晓娟, 2012,《预期寿命与中国家庭储蓄》,《经济研究》第8期,第107～117页。
|
| [9] |
沈坤荣和谢勇, 2012,《不确定性与中国城镇居民储蓄率实证研究》,《金融研究》第3期,第1～13页。
|
| [10] |
王弟海和龚六堂, 2007,《增长经济中的消费和储蓄》,《金融研究》第12期,第1～16页。
|
| [11] |
汪伟, 2011,《收入不平等与中国高储蓄率:基于目标性消费视角的理论与实证研究》,《管理世界》第9期,第7～25页。
|
| [12] |
徐忠、张雪春、丁志杰和唐天, 2010,《公共财政与中国国民收入高储蓄倾向》,《中国社会科学》第6期,第93～107页。
|
| [13] |
杨继军和张二震, 2013,《人口年龄结构、养老保险制度对居民储蓄率的影响》,《中国社会科学》第8期,第47～66页。
|
| [14] |
杨盼盼、马光荣和徐建, 2015,《理解中国2002-2008年经常账户顺差扩大之谜》,《世界经济》第2期,第112～139页。
|
| [15] |
臧旭恒和张欣,2018,《中国家庭资产配置与异质性消费者行为分析》,《经济研究》第3期,第21～34页。
|
| [16] |
周茂、陆毅和李雨浓, 2018,《地区产业升级与劳动收入份额:基于工具变量的估计》,《经济研究》第11期, 第132～147页。
|
| [17] |
Caballero R.J. 1990. “Expenditure on Durable Goods: A Case for Slow Adjustment”, Quarterly Journal of Economics, 105(3): 727-743.
|
| [18] |
Chamon M. D., and E. S. Prasad. 2010. “Why Are Saving Rates of Urban Households in China rising？”, American Economic Journal: Macroeconomics, 2(1): 93～130.
|
| [19] |
Chodorow-Reich,and J. Wieland. 2016. “Secular Labor Reallocation and Business Cycles”, NBER Working Paper, no. 21864.
|
| [20] |
Choukhmane T., N. Coeurdacier, and K. Jin. 2013. “The One-child Policy and Household Savings”, CEPR Discussion Paper, no. DP9688.
|
| [21] |
Cooper R., and G. Zhu. 2017. “Household Finance in China”, NBER Working Paper, no. 23741.
|
| [22] |
Flavin M. 1981. “The Adjustment of Consumption to Changing Expectations about Future Income”, Journal of Political Economies, 89(4): 974-1009.
|
| [23] |
Ge S., and D. T. Yang. 2011. “Labor Market Developments in China: A Neoclassical View”, China Economic Review, 22(4): 611～625.
|
| [24] |
He H., F.Huang, Z.Liu, and D.Zhu. 2018. “Breaking the Iron Rice Bowl: Evidence of Precautionary Savings from the Chinese State-owned Enterprises Reform”, Journal of Monetary Economics, 94(1): 94～113.
|
| [25] |
Imrohoroglu A., and K. Zhao. 2018. “The Chinese Saving Rate: Long-Term Care Risks, Family Insurance, and Demographics”, Journal of Monetary Economics, 96(3):33-52.
|
| [26] |
Judd C. M., and D. A. Kenny. 1981. “Process Analysis: Estimating Mediation in Treatment Evaluations”, Evaluation Review, .5(5): 602～619.
|
| [27] |
Kuijs L., 2006. “How Will China's Saving-Investment Balance Evolve？” Policy Research Working Paper, No.5, World Bank.
|
| [28] |
Modigliani F., and S. L. Cao. 2004. “The Chinese Saving Puzzle and the Life-cycle Hypothesis”, Journal of Economic Literature, 42(2): 145～170.
|
| [29] |
Musgrave, and R. A. 1969. “Fiscal Systems”, Yale University Press.
|
| [30] |
Wang X., and Y. Wen. 2012. “Can Rising Housing Prices Explain China's High Household Saving Rate？” Federal Reserve Bank of St. Louis, 93(2): 67～88.
|
|
|
|
