A Study Of Age Structure Change’s Influence On Household Saving

Traditional life cycle theory proves that population age structure can affecthousehold savings. The data of the sixth population census shows that China hasstepped into the aging society, whether the shift of the population structure is one ofthe most important factors that can explain our country’s high household savings. Thepaper will research into the effect of population age structure on household savingfrom theoretical and empirical study. First, the paper compares several consumptiontheories, on the basis of this a model is built to analyses the specific route throughwhich population age structure affect household saving. Then by using our country’s1953~2010time series annual data, the article set a VEC and VAR model. The resultsprove that the improvement of the old dependency ratio and the decrease of the youngdependency ratio can enhance the savings rate. We adjusted the dependency ratio andfind the same result. In addition, it finds that the model exists a structural breakpoint.Finally according to the results, this paper summarizes the impact of population agestructure shift on the household savings rate and makes some suggestions.