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Public Expenditures on Social Programs and Household Consumption in China

  • Emanuele Baldacci
  • , Giovanni Callegari
  • , David P. Coady
  • , Ding Ding
  • , Manmohan Kumar
  • , Pietro Tommasino
  • , Jaejoon Woo

Research output: Working paperPreprint

Abstract

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.
Original languageAmerican English
StatePublished - Mar 29 2010

Publication series

NameIMF Working Papers, Vol. , pp. 1-28, 2010

Keywords

  • China
  • People's Republic of
  • Cross country analysis
  • Economic models
  • Education
  • Fiscal reforms
  • Government expenditures
  • Health care
  • Income distribution
  • Pensions
  • Private consumption
  • Private savings
  • Social safety nets

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