Family Savings and Happiness in China:Evidence From the World Value Survey

Background and Purpose:Policymakers and researchers have shown increasing interest in the use of happiness as a measure of subjective well-being. The 12^th Five-Year Plan of the Chinese central government specifies one of the state’s developmental goals as promoting happiness.The literature on the determinants of happiness demonstrates that one’s happiness depends on various factors, including education level, income, health, employment status, marital status, age, gender, social networks, social capital, and so on. Family income has been identified as one of the important sources of happiness, and has a positive relationship with happiness. However, few studies focused on the relationship between family savings and happiness.Different from family income as a flow of economic resources, family savings is a stock of economic resources. Family savings may have unique contributions to happiness in addition to income. Family savings function not only as reserves to protect economic security and future consumption but also as an important instrument for facilitating long-term economic development and social mobility.

Methods:The study examines the relationship between family savings and individual happiness using multiple waves of the World Value Survey conducted in China (1995, 2001, and 2007, N=3,824). Happiness is measured by a four-level likert scale (very happy, quite happy, not very happy, and not at all happy) as the dependent variable. The study categorizes this scale into two groups (very happy/quite happy vs. not very happy/not at all happy). Family savings is indicated by a dichotomous variable (save money in the past year or not) as the independent variable. The analysis controls for demographic and socioeconomic characteristics, including age, gender, marital status, education level, employment status, family income, and survey year. After univariate analysis, the study conducts logistic regression analysis to examine the relationship between family savings and happiness.

Results: Logistic regression shows that, after controlling for demographic and socioeconomic characteristics, families that can save have the odds of feeling “very/quite happy” 1.52 times higher than their counterparts that cannot save (OR=2.52, p<.001). The average marginal effect of family savings is .16. That is, on average, those with family savings are 16% more likely to be “very/quite happy”. The findings imply that family savings have a significant positive relationship with happiness. Family savings should be paid more attention to as an important source of happiness.

Implications:The findings suggest that social policies aiming to help individuals and families accumulate assets can be an important supplement to other social assistance programs to promote happiness, and should be a necessary component in the social policy system. In particular, in order to promote happiness for low-income and disadvantaged populations, asset-based programs should be inclusive and provide additional institutional support for these populations. Further research should be conducted to examine why family savings are positively related to happiness and to explore what type of asset-based social programs can promote happiness successfully and effectively.