Much
has been made during the recent economic crisis of the vast difference in
household savings rates between the United States and China. The difference has led to the somewhat incongruous
outcome of massive lending from an emerging economy to industrialized ones, particularly
the United States. Although explanations
ranging from economic uncertainty and changes in the pension system in China have been
offered, a new NBER working
paper by Shang-Jin Wei and Xiaobo Zhang suggests a far more blog-worthy
explanation: marriage market competition
fueled by gender imbalances arising from sex selection practices in China.
From
the New York Times, which quotes from the paper:
“Families with sons compete with each
other to raise their savings rate in response to ever-rising pressure in the
marriage market. Competitive saving by these families spills over to greater
savings by other families, possibly through raising the prices of nontradable
goods such as housing.”
“Across Chinese provinces, there is
clear evidence that local savings rates tend to be higher in regions with more
unbalanced sex ratios.”
In other words, parents want their sons
to marry, and they figure that girls are more likely to want to marry rich
boys.
The authors note that while they looked
only at China, “other economies known to have a strong sex ratio imbalance
include Korea, Taiwan, Hong Kong, Singapore and India. These countries also
happen to have high savings rates.”
(HT: Tyler
Cowen)
I tried to think so, but I found it was not as the same in the actual process. As you mentioned, I still have doubts, but really thank you for sharing!