Online Payment Technological Innovation and Changes in Household Saving Rate: Evidence From China

In light of the rapid development of online payment and the consistent decline in household saving rate in China over the past decade, this paper examines the impact of online payment on household saving rate. By conducting theoretical analyses, we find that online payment decreases household saving rate by breaking through three internal mechanisms: psychological constraints, geographic constraints and income constraints. Empirical analysis based on the China Family Panel Studies survey data (2014, 2016, and 2018) supports the theoretical conclusions, particularly highlighting that online payment is more likely to reduce saving rates among individuals in western and central regions, females, younger individuals, those with lower educational level, and lower income groups. Results remain robust after addressing endogeneity with instrumental variable method, propensity score matching (PSM), propensity score matching with difference-in-difference (PSMDID), and treatment effects model.