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China has been developing very fast since the beginning of the 21st century.The net income of households has been increased a lot as well. Nonetheless,migration from rural areas to urban sectors tends to keep a high saving rateinstead of consumption. This essay tries to use the conventional Ordinary LeastSquare regression, along with the method of Instrument Variable to test theproblem of endogeneity, to discover the relationship between the saving ratesof rural households and labor migration, controlling for other characteristicvariables including having insurance, marital status, education, havingchildren, health conditions. The assumption is that migration contributespositively to the dependent variable, meaning that migration could increase thehousehold save rates. However, the conclusion is that it is negatively with thehousehold save rates. All the other variables regarding education, healthconditions, marital status, insurance, and number of children are negativelyrelated with the household saving rates.

Examining the Relations between Household Saving Rate of Rural Areas and Migration