Divergence in short and scarring effects of pandemic uncertainty on household savings——A quasi-natural experiment from China

We exploit repeated cross-sectional data from the Urban Household Survey and use SARS as a case to estimate the effects of pandemic uncertainty on household savings, focusing on both short-term and scarring effects. A pre/post-2003 generalized difference-in-differences estimation is implemented, supplemented by propensity score matching of otherwise similar individual and household characteristics to enable comparison. The results show no evidence of scarring effects after 2003, whereas in 2003, a significant increase in the household savings rate is observed.