We study the effect of(declining)Confucian social norms on human capital investment and saving rates in China.In our simple two-period model,parents have the option to invest in both a risk-free asset and the human capital of their child.We assume that social norms,and hence enforcement mechanisms,for supporting old-age parents may differ in each region and that these cultural norms for acceptable filial piety determine the probability of non-performance by children on their repayment obligations to parents and hence the variation of return that parents can expect to receive from investing in children.Modeling default by children as a function of the prevailing social norms gives us the flexibility to study the impact of the declining Confucian influence on Chinas consumption-saving trends.Based on our large survey data across 11 provinces,this paper adds to the current literature in several ways.First,we provide evidence supporting the key assumption in the life-cycle hypothesis-that parents do view their children,especially sons,as a source of retirement income.Thus,parents investment in childrens human capital is not altruistic neither are intergenerational transfers from adult children to old-age parents.Second,we offer an alternative explanation for the high household savings in China.That is,in addition to the One Child Policy-and the gender imbalance-induced pressure to save more(Wei and Zhang,2011),the lack of financial development and the declining influence of Confucianism are also significant contributors to Chinas ever-growing saving rates.