Understanding declining household savings rate: a perspective from working hours of married women

Manman Yao, Cuihong Long and Yuxin Yao

Applied Economics, 2026, vol. 58, issue 33, 6738-6752

Abstract: In this paper, we investigate the contribution of married women’s working hours to the declining savings rate in China over the past decade, using the 2018 CLDS data. Both our OLS and 2SLS results suggest that longer working hours of married women generally decrease the household savings rate. Specifically, we identify a non-linear relationship between work time and the household savings rate. Initially, the household savings rate increases with the working hours of married women, reflecting the income effect of labour supply. However, the savings rate decreases once they work overtime, which can be explained by the substitution effect of market work replacing home production, thereby reducing the fertility intention of married women. The reduction in potential child-rearing needs lowers precautionary savings and increases current household consumption. Furthermore, our analysis indicates that, in the presence of income risk, working overtime has a more pronounced effect on the declining savings rate.

Date: 2026
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DOI: 10.1080/00036846.2025.2526176

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