Study On The Retirement Shock On Consumption Of Chinese Urban Residents

The strikes of China’s aging wave combined with lagging economic growth model relying on exports and investment, making China face the two core challenges during the transition phase:retirement shock and weak domestic consumption. Thus, it is a serious problem that how to deal with the retirement crisis and enhance the level of consumption of residents. The paper takes Chinese hot issue (double track system of endowment insurance) into account originally. We will mainly analyze whether the heterogeneous influence of retirement shock from enterprises and from government agencies and institutions on consumption of Chinese urban residents exists? What areas are heterogeneity of effect reflect in? What are the reasons for heterogeneity of effect?Full text is based on the background of severe retirement shock and low level of consumption of residents. Firstly we interpret the relationship between retirement shock and consumption of residents from a theoretical perspective through introduction of theoretical basis and analysis of theoretical mechanism, found that retirement shock affects consumption of residents by direct and indirect ways and directions of effects are both positive and negative. Secondly, under the premise that grasping the situation and development trend of retirement shock and consumption of residents, we select the macro panel data in 30 Chinese regions in 1998-2012 and conduct empirical test in two parts for static and dynamic innovatively. We used hybrid Ordinary Least Squares, fixed effect and random effects estimation method in static panel model and hybrid Ordinary Least Squares, Generalized method of moments in dynamic panel model Meanwhile, in order to ensure the accuracy of the model estimation results we add consumer-related potential control variables into original model to conduct robustness tests. Finally, empirical results show that no matter static or dynamic model, two types of retirement shock both have heterogeneous effects on overall consumption level and consumption structure of Chinese urban residents. Specifically as follows:in aspect of total consumption expenditure level of residents, retirement shock from enterprises has significant inhibitory effect on it and retirement shock from government agencies and institutions has significant positive effect on it, however, the significance of the influence degree of latter is lower than that of former. In aspect of consumption structure of residents, the situation is more complex, the consistent results of static and dynamic model are that retirement shock from enterprises has significant positive effects on education, culture and entertainment spending and has significant negative effects on food and clothing consumption expenditure and has no significant effect on transportation and communication consumption expenditure. Retirement shock from government agencies and institutions is not associated with transportation and communication consumption expenditure and has a significant positive correlation of varying degrees with other spending items. The main reasons for these heterogeneous effects are inequality caused by double track system of endowment insurance and subjective distinction between two types of retirees.Corresponding to above conclusions, we propose some recommendations as follows:(1) Reforming double track system of endowment insurance and release the consumption effect of merger reform; (2) Improving the pension, medical and other social security system to stabilize consumer expectations; (3) Implementing the "healthy and active aging" actively to deal with the negative impact of retirement; (4)Adjusting the market structure to promote the development of aging industry and silver market; (5) paying attention to the potential impact factor and raise household consumption expenditure.