Speaker:Feng Huang, Institute for Advanced Research, Shanghai University of Finance andEconomics
Host: Pinghan Liang,Associate Professor, RIEM
Time: 13:55-15:30, May10, Friday
Venue: 颐德楼H505，Yide Hall, Liulin Campus
Abstract: Using the large-scale state-owned enterprises (SOE) reform in the late1990s which caused massive lay-off among SOEs workers in China as a naturalexperiment, we empirically test the theory of precautionary savings in a rapidgrowing transition economy and quantify the importance of precautionary savingmotive in explaining the dramatically rising Chinese urban household savings.We find that precautionary savings due to the significant increase in incomeuncertainty among SOEs workers can explain about 21%-32% of the increase inChinese urban household savings from 1995 to 2002. Precautionary saving motivedue to the economic transition is an important contributor to the risingChinese household saving rate.
