The Research About The Impact Of Social Security To Residents’Consumption

Consumption, investment and exports are the there main force that driving China’s economic growth. For a long time, China was depending on large-scale investment and rapid growth of exports to promote rapid economic growth. The contribution of consumption to economic growth is declining. The lack of residents’consumption has become restriction of China’s sustained, rapid growth. Studies suggested that, the transition of social security system in1990s had a profound impact on residents’consumption behavior. Our current imperfect social security system restricts the growth of residents’consumption. Therefore, this paper aims to study the relationship between social security and residents’consumption as a starting point, explore the reasons from the perspective of social security on the basis of the lack of residents’consumption demand.Firstly, this article describes the framework of China’s social security system, investigate the level of China’s social security, and point out the problems of China’s social security. Secondly, it investigates the impact on the consumption of social security theoretically and empirically. It come out to be that social security fund expenditure has a significant role in promoting consumption, but finance the social security fund expenditure has no significant effect on the consumption. It is caused by the excessive growth of fiscal revenue which has an extrusion utility to the consumption. Therefore, the combination of theoretical and empirical research findings, I believe that we should remain moderate growth in the revenue and adjust the structure of financial expenditure, increase expenditure on social security finances, and focus on coordinated development between different areas and different occupations. In the same time, we should constantly improve the sources of the social security fund, accelerate the construction of the social insurance system, improve the legal system of social security, and make China’s social security promoting consumption and maintaining social stability.