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Public Expenditures on Social Programs and Household Consumption in China
Author:
Mr. Emanuele Baldacci
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,
Ding Ding
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Mr. David Coady
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Giovanni Callegari
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Pietro Tommasino null

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,
Jaejoon Woo
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Mr. Manmohan S. Kumar
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Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 069
Language:
English
Publication Date:
01 Mar 2010
DOI:
https://doi.org/10.5089/9781451982138.001
ISBN:
9781451982138
ISSN:
1018-5941
Pages:
28
Keywords:
WP; consumption impact; savings rate; household saving; expenditure reform; GDP increase
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 1¼ percentage points of GDP.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund