This paper examines the role of rising housing prices and borrowing constraints as determinants of China's high household saving rate, especially among young households. Using a life-cycle model of saving behavior in the presence of borrowing constraints, we show that the relationship between...

Economic reforms in China have brought rapid growth in nonagricultural employment in rural areas and a substantial shift in the structure of rural employment. These changes have led researchers to question the conventional view of rural China as a labor surplus economy with poorly functioning...