Research On The Impact Of Pension Insurance On Urban Residents' Consumption

Although the development of China’s economy is flourishing,The lag of social development and the imperfection of the social security system are the important reasons for the decline of Household consumption tendency.Under the international background of financial crisis and the rise of trade protectionism,The stimulation of our domestic demand like consumption and investment is the necessary method to expand our economy.The social security of retired person is one of the most important factors which influence the social consumption.Figuring out the relationship between pension and consumption could provide evidence to government.After carefully study about relevant theories,I introduce the research method and innovation at first.I arranged the important theories like the Absolute Income Hypothesis,the Life Cycle Hypothesis and the Precautionary Savings Theory,which funded the theory basic of this article.secondly,qualitative analysis was carried out on the relationship between the endowment insurance and the consumption of urban residents.I analyze the history and the present situation of endowment insurance system.At the mean time,I introduce the trend and composition of individual’s consumption.This article analyzes how social security affects household consumption tendency.This article holds that pension influence consumption through personal income,income redistribution and personal expectation.Then I founded a model according to Franco Modigliani’s Life Cycle Hypothesis.The main variables contain personal consumption expenditure,income,pension and coverage rate of endowment.Data of 17 prefecture level city of Shandong province from 2005 to 2015 was used to do the quantitative analysis.The result shows that the pension positively affects consumption.At last,according to the results of empirical analysis,we put out some suggestions in order to improve the social endowment insurance and prompt our consumption.Including:figure out the duties belongs to who,raising the coverage of social endowment insurance,enhance the operation of endowment insurance fund.