Exogenous Shocks,Social Security And Household Savings Behavior

In early 2020,the suddenly outbreak of novel coronavirus pneumonia aggravated the uncertainty of macroeconomic operation at home and abroad.It not only brought psychological panic to the public,but also led to certain changes in residents’ individual economic decisionmaking behavior.The uncertainty of economic operation will enhance the preventive motivation of residents.In addition to relying on the social security provided by the government,people will also take the initiative to take self-protection measures,which is,saving.As an individual behavior of residents,the change of savings has a direct impact on a country’s future capital accumulation and investment,which is closely related to the development of national economy.Therefore,it is of great theoretical and practical significance to study the impact of such sudden public health emergencies on residents’ savings decision-making behavior,especially to test the differences in savings behavior of residents with different levels of social security participation in the face of the shock and the correlation between social security and residents’ savings after the shock(because the novel coronavirus pneumonia epidemic has not yet been released,the analysis is based on the SARS incident perspective).Savings is the part of residents’ current income that is not used for current consumption.When unexpected shocks occur in the economy and society(for example,this COVID-19),the savings are often the first choice for people to deal with shocks.This shows that after the shock,residents will make different adjustments to their short-term and long-term savings decisions.As the "shock absorber"and "stabilizer" of modern social residents to deal with exogenous shocks,social security can ensure the basic life of urban and rural residents in the event of external shocks.Therefore,it is bound to have an important impact on residents’ savings decisions.Based on this,this thesis adds social security factors to the inverted "U" model between residents’ savings and uncertainty proposed by Qi Tianxiang,and puts forward a hypothesis:when the uncertainty increases due to exogenous shock,the existence of social security will strengthen residents’ security awareness,and residents participating in social security projects will save more,but there is an inflection point for this promotion effect.After crossing this point,residents’ savings will decrease with the increase of social security,that is,there is also an inverted "U" relationship between residents’ savings and social security investment.To verify the above hypothesis,the thesis used 2003 SARS incident as a natural experiment.First,based on the data from the Chinese General Social Survey(CGSS)and the Chinese Household Income project survey(CHIP)database,the Difference-in-Difference method was used to verify the impact of this sudden public health emergencies on the income,consumption and savings behavior of the residents in the treatment area(Beijing),and whether the effect would be different from the degree of social security participation.The results show that the overall savings rate of Beijing residents has decreased due to the increase of consumption(mainly the expenditure of medical expenses)in the short term(2002-2004),and increased due to the motivation of preventive savings in the long term(2002-2007);at the same time,the impact of the SARS incident on the savings rate of the group that cannot enjoy the sound social security is significantly higher than the overall level.This conclusion proves that the difference in the degree of social security participation will indeed lead to different changes in residents’ savings decision-making.Under the development level of social security in that year,the relationship between social security and residents’ savings is located in the left half of the inverted"U" curve.Participating in social security projects will enhance residents’awareness of prevention to a certain extent and promote residents’ savings.The left half of the inverted "U" curve has been verified.Then,based on the provincial panel data from 2003 to 2019,this thesis selects the investment of social security and employment in local finance as the independent variable and residents’ savings and savings rate as the dependent variable,and uses the panel data regression model to make a regression analysis of social security factors and residents’ savings.The empirical results of linear regression show that the overall investment of social security and employment expenditure in China has not crossed the inflection point of the inverted "U" curve,and will still have a positive incentive to residents’ savings,which is basically consistent with the result of Difference-in-Difference.The results of nonlinear regression generally support that there is an inverted "U" relationship between them,which preliminarily verifies the theoretical hypothesis proposed in this thesis.At the same time,according to the inflection point calculated by the regression coefficient,it is found that most provinces and cities have not crossed the inflection point,so the impact of social security on residents’ savings is still in the rising stage of the inverted "U" curve.In addition,in the analysis of the regression results of the control variables,it is found that residents’ education level will also have a significant impact on their savings behavior.The higher the number of years of education,the flatter the inverted "U"curve,indicating that a higher level of education can help people form a more reasonable and scientific concept of intertemporal decision-making and reduce the possibility of impulsive savings or consumption.Therefore,according to the theoretical and empirical analysis of this thesis,when there is an unexpected exogenous impacts on the economy and society,the groups that cannot enjoy sound social security and low income are often more impacted.In order to maintain the stability of social order and promote the economy to return to normal as soon as possible,we should further expand the coverage of social security,promote the national integration and balance of social security work and ensure the basic life of vulnerable groups,reduce the number of lowincome population and improve the income redistribution system,narrow the gap between the rich and the poor,promote regional coordinated development,improve the education system and teaching quality at all levels in order to promote the optimization of the national savings structure.