Brothers, household financial markets and savings rate in China

Weina Zhou ()

Journal of Development Economics, 2014, vol. 111, issue C, 34-47

Abstract: This study analyzes the effect of the number of brothers an individual has on that individual's household savings rate under the current underdeveloped household financial market in urban China. I show that having an additional brother reduces an individual's household savings rate by at least 5 percentage points. Brothers help households (1) by sharing risks, providing a source of informal borrowing, and (2) by sharing the cost of supporting parents. Sisters play a minor role in affecting a household's savings rate, mainly because of cultural norms. The decline in the average number of brothers in households induced by population policies explained at least one-third of the increased aggregate household savings rate in urban China.

Keywords: Household savings; Family structure; Financial market development (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (35)

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Working Paper: Brothers, Household Financial Markets and Savings Rate in China (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:111:y:2014:i:c:p:34-47

DOI: 10.1016/j.jdeveco.2014.07.002

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