We examine whether access to higher education impacts household saving rates. A 2-period model of household saving decisions demonstrates why increased college opportunities induce households with children to save more. We examine this theory using survey data from Chinese households during the unprecedented education expansion. Using estimates of the change in the expected probability of college attendance, we estimate the effect on household saving rates by comparing households before and after the reform. We find that a 10-percentage point increase in the probability of going to college raises the saving rate by 5.9 percentage points.
|Journal||China Economic Review|
|State||Published - Feb 2022|
Bibliographical notePublisher Copyright:
© 2021 Elsevier Inc.
- Higher education expansion
ASJC Scopus subject areas
- Economics and Econometrics