Research On The Impact Of Population Aging On Local Fiscal Sustainabilit

Since China entered the aging society in 2000,the aging of the population has shown a trend of gradual deepening.The increasing aging has had a strong impact on all aspects of China’s economic and social development,the most direct manifestation is the impact on labor supply,old-age security,medical care,etc.,and finally on the sustainability of local finance.On the one hand,with the deepening of aging,continuous financial investment is required to ensure it,and the rigid expenditure of local finances such as pension and medical care will increase significantly;On the other hand,under the accelerated aging situation,there will be a corresponding shortage of labor force in China,and the scale of retirement groups will continue to increase,and aging will cause great pressure on local income by acting on labor,consumption,investment,etc.;Therefore,aging will greatly increase the contradiction of local fiscal revenue and expenditure,affecting the sustainability of local finance,and it is in this context that this paper explores the impact of aging on local fiscal sustainability.Based on the existing literature and theory,this paper first analyzes the mechanism of the impact of population aging on state fiscal sustainability from the relevant theories.Secondly,the current situation of China’s aging population and local finance is discussed.Finally,on the basis of the entropy method to calculate the local fiscal sustainability evaluation index,the impact of aging on local fiscal sustainability is empirically analyzed by using provincial panel data,and the results show that:First,local fiscal sustainability has generally shown a downward trend;Second,based on the impact and mechanism analysis of provincial panel data on population aging on local fiscal sustainability,it is found that population aging has significant negative influence on local fiscal sustainability of China.After replacing the core explanatory variables and transforming the empirical test method,the results are still consistent with the basic regression.The results of mechanism test show that population aging affects local fiscal sustainability through labor force size,consumption scale and structure.Based on the above research conclusions,this paper comes up with countermeasures from the following aspects: First,effectively resolve the risk of local government debt.Second,local finances should be opened up and throttled.Third,seize the window period of the 14 th Five-Year Plan and the following years to develop the silver economy to achieve fiscal compensation from aging.Fourth,continue to explore appropriate and economical ways to provide for the elderly.