The Effect of China's Demographic Transition and Economic Growth on Saving: Theoretical and Empirical Analysis

摘要

In this paper, we study the effect of China's demographic transition and economic growth on saving by theoretical and empirical analysis. The permanent-income hypothesis is extended by taking demographic transition into consideration and using particular permanent income anticipation pattern to reflect Chinese saving behavior. The empirical analysis implies that saving rate is affected by length of the remaining earning years negatively, income growth rate positively and length of the remaining lifetime positively. The empirical result is consistent with the theoretical implications. And it also shows that net export and the saving rate are positively related and demonstrates that the influence of the total dependency on the saving rate is dependent on the value of the total dependency, that is, an increase in the total dependency results in a rise in the saving rate when the total dependency is larger than 63.8%, while the total dependency and the saving rate is related negatively when the total dependency is less than that. Eventually, we conclude that demographic transition affects the saving rate by changing the remaining earning years.