Working Paper: NBER ID: w18911
Authors: Qingyuan Du; Shangjin Wei
Abstract: Motivated by recent empirical work, this paper formalizes a theory of competitive savings - an arms race in household savings for mating competition that is made more fierce by an increase in the male-to-female ratio in the pre-marital cohort. Relative to the empirical work, the theory can clarify a number of important questions: What determines the strength of the savings response by males (or households with a son)? Can women (or households with a daughter) dis-save? What are the conditions under which aggregate savings would go up in response to a higher sex ratio? This theory can potentially help to understand the savings patterns in China, India, Vietnam, Singapore, Hong Kong, and other economies that have experienced a dramatic increase in the pre-marital sex ratio.
Keywords: savings; sex ratio; marriage market; current account
JEL Codes: E21; F32; O16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| male-to-female ratio in the premarital cohort (J12) | increased savings rates among men (D14) |
| higher sex ratio (J16) | ambiguous impact on women's savings (D14) |
| increase in male savings (D14) | overall rise in aggregate savings (E21) |
| increase in sex ratio (J19) | aggregate savings rates rise (E21) |
| sex ratio rises from 1 to 1.15 (J19) | economy-wide savings rate increases by more than 6% of GDP (E20) |