Research On Social Security Acting On Resident Consumption

In the modern social security system,the social security action on consumption has attracted the economists and sociologists'considerable concerns. In recent years,rapid growth of China's national economy is mainly driven by investment, while the contribution of consumption on China's GDP decreased year by year. The increasingly serious problem of insufficient effective demand has become an obstacle to healthy economic development. In addition, nearly 20 years, China's urban and rural residents have experienced the transformation process of social security from the traditional to the modern, which has a profound impact on the consumption behaviors of Chinese residents. Therefore, the research on social security action on consumption has important practical significance.According to the current financial crisis and the economic development problems, such as continued reduction consumption tendency of China's residents and high savings rate, this thesis researches the relationship between the social security and consumption. Employing the theoretical analysis and empirical study method, this thesis explores the reasons that consumption demand is insufficient in view of the social security. The contributions of this thesis are as follows:1. The research status of social security and consumption is reviewed and the mechanism of the social security acting on the consumer is studied;2. Using panel data about 31 provinces of the country's social security expenditure, urban and rural residents, rural income from 1997 to 2008, we study the relationships between Social Security and consumption based on the following methods, such as Granger causality test method, cointegration analysis, regression analysis, other quantitative methods and the relative income hypothesis theory. The conclusions are drawn as follows: (1) the social security to consumption has unidirectional Granger causality; (2) There exists the long-term equilibrium relationship between the social security and consumption while the short-term adjustment is negative; (3) In order to exam the social security how to act on resident consumption, the social security variable is introduced into J. S. Duesenberry's "relative income" hypothesis. Both the social security and resident income have the positive roles on the consumption, however, the role of the social security is not significantly. 3. According to the conclusions of the empirical analysis, some suggests how to perfect and improve the social security system are presented focusing on the practical problems, such as the current financial crisis, continuously decreasing in consumption trend of Chinese residents and high savings rate.