Political violence and household savings: Evidence from the long-term effects of the Cultural Revolution

Logan Li

The Journal of the Economics of Ageing, 2021, vol. 19, issue C

Abstract: This study explores the long-lasting influence of political violence on household savings using the Cultural Revolution in China as a quasi-experimental setting. By employing a difference-in-difference strategy, I find that for cohorts in their childhood and adolescence during the Cultural Revolution, a 1-standard-deviation increase in political violence is associated with about 0.1-standard-deviation higher savings rates nowadays. Other potential confounders before, during, and after the Cultural Revolution do not fully explain the positive relationship. I also find that political violence could influence future savings through its effect on factors internal to the individual, but that external factors do not play a role. Finally, I identify that persistence is lower in regions with nowadays higher economic openness and a better rule of law.

Keywords: Political violence; Household savings; History and economics (search for similar items in EconPapers)
JEL-codes: D12 D91 N45 N95 Z10 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecag:v:19:y:2021:i:c:s2212828x21000141

DOI: 10.1016/j.jeoa.2021.100320

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