Alex's China & the World Economy Part A: Housing Sector I. Explaining the high saving rates in China - 5. The role of Marriage

Question 1

Which source is this whole section based on?

Answer 1

Wei, S-J, Zhang, X. (2011). The competitive saving motive: Evidence from
rising sex rates in China. Journal of Political Economy, 119 (3), 511-564

Question 2

How does China’s rising sex ratio influence household saving behavior?

Answer 2

Wei & Zhang (2011): Rising sex ratios (more men than women) increase competitive saving among households with sons.
Sex ratio = number of men per woman in the premarital cohort.
As marriage becomes more competitive, parents of sons save more to improve their son’s marriage prospects.
Households with daughters may:
Save less (relying on future sons-in-law’s savings),
Or save more (to protect daughters’ bargaining power or afford rising housing costs).
Since 1980, both sex ratios and saving rates have risen in China.

Question 3

What evidence supports the competitive saving motive in China?

Answer 3

2007: Sex ratio at birth = 124 boys per 100 girls.
By 2005: 30 million more men than women under age 25.
92.2% of households with sons cite son-related reasons for saving (vs. 86.4% for daughter-households).
In families with two children, those with at least one son are more likely to save for children’s weddings.
Rural areas: Higher-quality housing reduces likelihood of having an unmarried adult son at home.
Urban areas: Homeownership increases son’s marriage prospects.

Question 4

Local sex ratios and saving behavior

Answer 4

Data: 2002 CHIP; 122 rural counties + 70 cities.
Households with sons save more than those with daughters.
Regression results:
Rural: local sex ratio has a strong positive effect on saving for son-households.
Urban: rising sex ratios increase saving for both son- and daughter-households, but more so for son-households.
Effect is stronger for son-households after removing outliers.

Question 5

How does the marriage market affect housing and saving behavior in China?

Answer 5

Higher sex ratios → more competition → higher housing costs.
All households must save more to afford housing.
Evidence:
Higher sex ratios correlate with larger house sizes and higher housing values (especially in cities).
Provincial data:
1990: average sex ratio (age 7–21) = 1.045
2007: increased to 1.136
2005: Jiangxi, Shaanxi, Anhui = ~1.32–1.37
1 in 6 boys born in 2005 in these provinces may remain unmarried.

Question 6

General equilibrium effects of sex ratio imbalances

Answer 6

Provincial-level data (1980–2007) used to estimate the broader impact.
Regression results (Table 14):
Sex ratio coefficients are positive and significant across all specifications.
Higher local sex ratios → higher local saving rates.
Results are robust to:
Multiple control variables
Different estimation methods
Conclusion:
Households with sons save more in regions with high sex ratios.
This explains about half of the increase in household saving rates (1990–2007).
As sex ratio imbalance worsens, competitive saving will intensify.