A Research About The Effect Of Social Endowment Insurance On Urban Residents’ Consumption

After being severely hit by the financial crisis in 2008,the model of economic development of China has transformed from an investment-and-export-oriented one to a consumer-oriented one.At present,consumption has gradually been in a firm foothold and become the first driving force for economic growth.By 2017,the contribution rate of the ultimate consumption to economic growth reached 58.8%,although the contribution rate declined 5.6 percent year-on-year,the overall situation was considerable.However,since 2010,China’s consumption rate was remained at around 35%,and which was 39.21%in 2016,it only increased 4.21 percentage for six years.Compared with the average consumption rate of the world,which is 60%or so,we still have a long way to go.Therefore,it is necessary to speed up the improvement of the consumption structure of residents,to change the mode of development considered to be high-input,high-consumption,low-efficiency and extensively-developed,and to solve the problem of insufficient domestic demand essentially.As one of the important factors affecting consumption,social basic endowment insurance has influenced the current consumption of residents by three functions of "redistribution of income,savings,and insurance" for long time.Since the reform and opening up,the construction of the social basic endowment insurance system has gradually gone into orbit.Under the promotion of policies,the system of social endowment insurance provided for the urban dwellers against pension pressure has achieved complete coverage,and now the growing number of people participate in it.Besides,the rising fund balance has provided financial support for many residents to weather their pension risks in advance,which will surely have great impact on the residents’ pension consumption expectation and current consumption.There are many researches about the effect of social endowment insurance on household consumption.However,scholars mostly use the national macro data to conduct empirical studies,ignoring the possibility that the magnitude of this effect varied among the degree of economic development.Therefore,this article selects Guangdong province as the research object from the mid-perspective point of view,and analyzes it through two types of regions,which divided by the degree of economic development.As is known to all,in addition to being a province with strong economic power,Guangdong has also become a province with a large population due to the accumulation of numerous"foreigners." They have made tremendous contribution to the labor-intensive industries in Guangdong and the new industries that have been upgraded in the Pearl River Delta region in recent years.Hence,it is of great practical significance to safeguard the interests of Guangdong laborers,improve the quality of people’s lives,and seek for the welfare of more people at the bottom of society.At the same time,it is critical to study the relationship between the social endowment insurance of Guangdong province and urban residents’ consumption,and how high the relevance of this relationship is.It is also vital to improve the pension insurance system,enhance the well-being of residents,and stabilize and promote consumption.After reading a lot of literature,this paper theoretically concludes that social endowment insurance has a positive or negative impact on the consumption of urban residents in.Guangdong.When researching on this insurance situation in Guangdong,this paper finds that social pension insurance system is meeting problems,including the risk of positive effect reducing,low expenditure level of overall funds,increasing pressure on smooth running,funds unbalance growth for regional effect weakness and so on.Based on this,this paper makes use of the panel data of 21 cities in Guangdong province from 2006 to 2016 to conduct empirical analysis using random effects model and fixed effect model,and draws the following empirical results:the impact is positive and long-term stability between social pension insurance and urban residents’ consumption.But those effects are different from regional to another,we can see that social pension insurance has a little positive promoting effect on consumption of urban residents in the Pearl River Delta,but a great positive promoting happens in other places.Therefore,in conjunction with the previous analysis,the conclusions of this paper are as follows.First,the residents’ consumption in Guangdong is most affected by disposable income,and the effect of social endowment insurance on promoting the consumption remains inadequacy.Second,the impact of social endowment insurance on the total consumption is diluted due to regional economic,so we should accelerate to adjust the imbalance in the social endowment insurance system.Thus,four policy recommendations are as follows.First,it is necessary to improve the operation and supervision system of the social endowment insurance fund.Second,it is vital to raise the propaganda of the Guangdong social endowment insurance system is also important.Third,we should optimize the social endowment insurance in the Pearl River Delta.Fourth,to reduce the payment burden of urban resident in the Non-Pearl River Delta region is also important.