Study On The Effect Of Basic Old-age Pension On Urban Residents' Consumption In Liaoning Province

Since the past 40 years of reform and opening up in China,the Chinese economy has made remarkable achievements,and its economic aggregate now ranks second in the world.Along with the stable and high-speed economic growth,people's living standard has improved significantly and achieved a well-off life.However,the propensity to consume of residents has gradually declined,so the consumption deficiency becomes the main shackle of economic development.At present,under the complex circumstances of economic restructuring,stimulating consumption and expending domestic demand will make a great difference.The basic pension income,one of the main factors affecting the consumption of residents,could increase the demand of consumer and drive economic growth with its development and perfection.Therefore,it's great of significant for us to studying the impact of basic pension income on urban residents' consumption,and this research will be conducive to stimulate the consumption demand of urban residents,improve the basic endowment insurance mechanism,and promote economic development stable and healthy.Based on the summary of previous scholars' research,the author firstly expounds the related concepts of basic pension insurance and urban residents,analyzes the main theories of basic pension insurance affecting residents' consumption,and introduces Keynes' s theory of absolute income,the life cycle of Modigliani,relative income hypothesis of Dusenberg and preventive savings theory,which lay the theoretical foundation for the establishment and empirical analysis of this paper.Secondly,we conduct a qualitative analysis of the relationship between pension insurance and urban residents' consumption.It mainly introduces the current situation.On this basis,we conclude basic pension insurance mainly stimulates residents' consumption by affecting the income of residents,regulating the income redistribution of residents and the psychological expectations of residents.Thirdly,this paper combines the actual situation of Liaoning Province,using the panel data of 14 prefecture-level cities in Liaoning Province from 2007 to 2017,taking the per-capital consumption expenditure of urban residents in Liaoning Province as the explained variable,per-capital pension income,per-capital disposable income and lagged variable of consumption as explanatory variables,to study the correlation between basic pension income and urban residents' consumption expenditure,and provide empirical data for stimulating household consumption and improving the endowment insurance system.The empirical results show that pension income significantly affects household consumption expenditure and both of them are positively correlated.Finally,this paper proposes policy recommendations to improve the pension insurance system and stimulate urban residents' consumption,such as to establish a reasonable wage growth mechanism,and increase the disposable income of residents;to expand the coverage of pension insurance,and achieve the income redistribution of the pension insurance system;to improve the overall level of basic endowment pension fund;to strengthen the investment and operation of pension fund and establish a multi-pillar old-age security system to raise pension replacement rate.