Research On The Influence Mechanism Of Population Aging On Local Government Debt

In recent years,the rapid expansion of the scale of local government debt has aroused the attention and concern of the community.While this phenomenon develops,China’s population aging is growing,and the increasingly serious imbalance of the population structure has a multi-level influence on economic development.In the view of international experience,the aging of the population can increase the scale of government debt by promoting the government to increase leverage.However,the research on China’s population aging and the scale of local government is still in its infancy,and there are very few analyses of its influence mechanism.In view of this,with reference to many literatures at home and abroad,this article mainly establishes a framework for the impact of population aging on the debt level of local governments.Specifically,this article sets the proxy variable local government explicit debt and implicit debt to the degree of local government bonds and the degree of urban investment bonds.As a result,this article summarizes the extent of local government bonds and the extent of urban investment bonds as indicators to measure the scale of local government debt.This article is based on the panel data of 29 provinces,including cities and autonomous regions,from 2009 to 2018,we conducted empirical analysis,trying to incorporate the population age structure into the local government debt analysis framework.The results show that the aging population will significantly affect the scale of local government debt.The more serious the aging population is,the faster the scale of local government debt expands.Furthermore,this paper decomposes the expansion of local government debt into two paths:active debt and passive debt.Through the intermediary effect test,i found that the aging of population will affect these two paths,as a result,this will greatly increase the level of local government debt.The specific impacts are as follows:First,for local governments,aging will affect personal income tax,corporate tax income and social security expenditures,aggravate the financial pressure of local governments,which in turn will expand the scale of local government debt.At the same time,the aging reduces the economic growth and pushes up the active debt financing scale of local governments.