Research On The Effect Of Governmental Education And Medical Security On The Rural Resident’s Consumption

In the "new normal" of China’s economy development,it is unsustainable to stimulate economy by investment and net export purely.A feasible method to promote economic development is developing demand-side management work while pushing forward the structural reform of supply-side.Resident’s consumption is an important part of demand-side,which should be noticed by policy-making department.However,the proportion of resident’s consumption in GDP of China is lower than the major developed countries and even some developing countries.As the rural residents take up a considerable proportion,it is important to stimulate the rural resident’s consumption.In China,the rural residents have super stability emotion for consumption,and they have stronger precautionary saving motivation that urban residents.The rural residents have experienced a massive change of policy as urban residents since 1978,which leads a uncertainty of income and expenditure,and they reduce consumption and gain more saving hence.For the rural residents,the human capital accumulation is the key to their life quality and individual development,so the governmental educational and medical security has an important effect on the rural residents’ welfare.I constructed a consumer model containing stochastic processes of income and necessary consumption expenditure,and research the effect of exogenous shock of education and medical policy on the rural resident’s consumption within the theoretical framework of this model.Before the empirical analysis,I give a review for the western representative literatures about the consumer problem,combing the literatures that apply and develop the western consumer theory in domestic.Moreover,we give another review for the literature that research the fiscal expenditure,medical and education policy’s effect on resident’s consumption,and focus on the rural resident’s consumption.After that,I constructed a consumer model containing stochastic processes of income and necessary consumption expenditure according to the existed literature,talking about the effect of the uncertainty and expected change of necessary consumption expenditure on rural resident’s consumption and give the hypothesis for empirical analysis.In the first empirical analysis,I employ the fixed effect model with yearly data of 333 municipals during 2000 and 2013,researching the effect of educational resource change on rural resident’s consumption and explaining why the lack of educational fiscal expenditure restrain the education resource.The results show that reduce of education resource worsen the rural resident’s expected education expenditure,making them reduce consumption.The lack of fiscal education expenditure reduces the education resource and then the rural resident’s consumption.Second,I emploied PSM-DID with CHIPS rural household survey data,researching the effect of compulsory school merger program on the rural resident’s consumption and education cost.I also talk about how the distance between the home and school affect the rural resident’s education cost.The empirical results show that the compulsory school merger program in China decreases the rural consumption and raises the education cost for rural residents;It further affects rural residents by increasing the schooling distance.At last,I employ improved Probit model with CHNS household survey data,reserching the effect of New Rural Cooperate Medical Insurance on the rural resident’s durable consumption.On the base of existed literature,I test the time-lag effect and heterogeneity effect of this insurance on consumption.I find that joining insurance in last period will help rural residents gain more durable consumption than that of current period;The rural residents who face higher health risk will gain more durable consumption than who face lower risk thank for the medical insurance.After the empirical analysis,I give the policy suggestion and research prospect.