Research On The Influence Mechanism Of Household Consumption Smoothing In China

The consumption rate of Chinese residents has been low for a long time,especially after entering the new century.Between 2000 and 2010,the consumption rate of residents fell from 46.9% to 35.6%,and the total consumption rate also fell from 63.3% to 48.5%.Although from 2011 to 2018,the resident consumption rate has steadily increased,but it has not exceeded 40%,and is far below the international average of 60%.Not only that,over the years,the gap in consumption between urban and rural residents,between regions,and between different groups has continued to widen.Understanding the formation mechanism of Consumption Smoothing and grasping the smooth channels of household consumption are of great practical significance to the construction of a long-term mechanism for consumer demand in China.During the economic transition,the study on consumption fluctuations of households in the face of various uncertainties is of great reference value for understanding the current macroeconomic growth of our country and building a more comprehensive social welfare network.This article takes Chinese household consumption smoothing as the research object,based on detailed micro-survey dynamic panel data,comprehensively considers existing research results at home and abroad,systematically studies the regional differences in Chinese household consumption smoothing,and explores the main causes of these differences.In order to further analyze the different channels that affect the smooth consumption of households,this article also selects three types of smooth consumption channels of households,communities,and governments to choose three impact mechanisms: labor supply,group effect,and unemployment insurance.Firstly,this article explores the main causes of these differences by discussing the regional differences in the smoothness of Chinese household consumption.To this end,the paper uses the risk sharing model to construct an indicator that measures the household's current consumption smoothing ability,and uses micro-survey data to compare and analyze the differences in consumption smoothing between the eastern,central,and western regions,and between urban and rural areas..The results of the study found that households in the eastern region had the strongest consumption smoothing ability,followed by the central region and the weakest in the western region,and the consumption smoothing ability of urban households was stronger than that of rural households.The main source of regional differences in consumption smoothing comes from the level of family self-sufficiency and national policies,especially the role of family net property and government subsidies.The labor supply and social welfare have not significantly affected the ability of family consumption smoothing.Social interaction at the community level has played a significant positive role in reducing the smoothing gap in consumption between regions.This shows that the closer the relationship between friends and relatives,the more able the family can withstand the impact of external risks.Some other factors such as householder education,family size,number of children,and regional financial ratio also affect the level of smoothing ability to a certain extent.Secondly,at the level of smooth consumption channels within the family,this article takes the family labor supply as the focus,and based on the double-wage life cycle model,examines the effect of family labor supply on consumption smoothing and its interconnection with other smooth channels.The research results show that for the wife 's wage income shock,the smooth consumption effect brought by the family labor supply is more prominent,while for the husband 's wage income shock,it is often necessary to take a multi-pronged approach through the accumulation of family assets to achieve a more effective Consumption insurance is smooth.For different age groups,couples in the age group of 30-47 have a stronger labor supply effect to smooth the consumption of themselves,the smooth effect of wealth is more prominent for families of middle-aged and elderly couples between 48-60 years of age,and Young couples aged 20-29 are "vulnerable groups" in the domestic consumer army.In addition,we also find that the impact of tax shocks on the smooth consumption capacity of different types of household labor supply is obviously heterogeneous.High-income groups have not significantly increased their own propensity to consume,and low-income groups have not been stimulated by the tax reform redistribution effect,and can only rely more on financial markets and relatives and friends to borrow to maintain smooth consumption.Then,at the level of the community's smooth consumption channel,this paper studies the influence of the same group effect on household consumption and its mechanism.By constructing a reasonable family consumption decision model,the related econometric equations are deduced,and then micro-empirical results are obtained using CFPS data.The study found that the same group effect still has a significant positive impact on total household consumption.Specifically,in the overall sample,for every 1% increase in average community spending,total household consumption increases by 0.831%;in the urban sample,for every 1% increase in average community spending,total household consumption increases by 0.588%;while in the rural sample,For every 1% increase in average community spending,total household consumption increases by 0.890%.In addition,the robustness test results show that the homogeneous effect of household consumption in our country is neither affected by the clustering effect nor the risk sharing mechanism.At the same time,there is no obvious "show-off" motive for household consumption.Finally,at the level of the government's smooth consumption channels,this article examines the impact of unemployment insurance benefits on consumption changes.Research shows that,regardless of the sub-item consumption or total consumption represented by food,the unemployment insurance replacement rate has no significant effect on the change in the consumption of the unemployed.The unemployed mainly rely on the accumulation of wealth represented by savings and net assets to smooth consumption.However,for long-term unemployed people,if the unemployment insurance premium increases by 1 percentage point,the decline in food consumption by the unemployed will decrease by 53% to 74%;for the group with the largest decline in consumption,the decline in food consumption will decrease by 16%.This shows that the group that truly benefits from the unemployment insurance system is extremely narrow,and the characteristics of "rescue" at the payment end of the unemployment insurance system in China are more obvious.The reason why unemployment insurance benefits have no significant effect on smooth consumption is mainly due to the unreasonable goals of China's unemployment insurance system,low coverage rates,and low levels of unemployment insurance benefits.To this end,it is recommended to reshape the system goals of China's unemployment insurance,increase the coverage rate,raise the standard of unemployment insurance benefits,and improve the unemployment insurance system.The contributions and possible innovations made in this article are:Firstly,from a research perspective,unlike domestic research on household consumption smoothing channels,which are mostly limited to external empirical or macro-level theoretical empirical analysis,this article comprehensively considers household internal and external consumption smoothing channels,and comparatively analyzes families,communities,and governments And so on at three levels.The second is the research method.In this paper,the dual-wage life cycle model is applied to the study of household consumption smoothing,and the internal labor supply and external homogeneous effects are included in it,which overcomes the quantitative "endogenousness".For the first time in academia,the Oaxaca-Blinder decomposition was applied to the analysis of regional differences in the study of household consumption smoothing,which provided a new perspective for related research on household consumption smoothing.At the same time,we also used advanced econometric methods such as comparative moment estimation and self-help method in the research process.The third is research and application.On the one hand,through our research,we can deepen people's understanding of the problem of Chinese household consumption smoothing and guide families to expand their own channels for smooth consumption.For example,we can increase household consumption through measures such as creating a fair labor market.The ability to smooth,ultimately enhance the subjective well-being brought about by households' smooth consumption.On the other hand,the research in this article can provide a theoretical basis for the formulation of government-related fiscal and welfare policies,so that the proposed policy recommendations are more targeted and policy measures are more feasible.