Monday, May 24, 2010
Freakonomics: Gender imbalances and savings rates
Why do some cultures save more money than others? A surplus of males!
Large savings and current account surpluses by China and other countries are said to be a contributor to the global current account imbalances and possibly to the recent global financial crisis. This paper proposes a theory of excess savings based on a major, albeit insufficiently recognized by macroeconomists, transformation in many of these societies, namely, a steady increase in the surplus of men relative to women. We construct an OLG model with two sexes and a desire to marry. We show conditions under which an intensified competition in the marriage market can induce men to raise their savings rate, and produce a rise in the aggregate savings and current account surplus. This effect is economically significant if the biological desire to have a partner of the opposite sex is strong. A calibration of the model suggests that this factor could generate economically significant current account responses, or more than 1/2 of the actual current account imbalances observed in the data.
File under "the unanticipated consequences of infanticide."
3 Comments:
By 
MTF, at
Tue May 25, 08:10:00 AM:
So, If a guy can't get a date on Friday night he just stays home and salts the money away? File that under "Unsurprising News", I guess.
I suppose further research would tell us that those same men are saving less or not at all if they are paying tuition bills.
By 
, at
Tue May 25, 06:07:00 PM:
All governemnt programs have "unanticipated consequences". Which is why we shouldn't believe them when they say they know what they are doing.
By Bomber Girl, at
Tue May 25, 07:22:00 PM:
"surplus of males" is an oxymoron. Just sayin'.
