Influence Of China's Social Security Spending To The Residents' Consumption Level

For a long time, China has been a country which pay attention to export and investment and look down on consumption. Reform and opening up for 30 years, we has been carried out a economic growth mode which pay attention to export However, because of Excessive dependence on export, In the global financial economic crisis begin with 2008, Our economic took a hit. History lessons make many experts and scholars gradually realize the importance of consumption in the face of economic crisis. With the economics background in the world, China's investment and export walking difficult. But because our country is a populous nation and consumption has a huge development space, expanding domestic demand and promoting consumption has become the important means in the face of the global economic crisis. There are many factors which influence the residents' consumption, but now for our country, imperfection of the social security system is one of the important reasons for the sustaining wearying of consumer behavior. After referring to the vast relevant literature of domestic and foreign about relationship between social security and consumer, this paper reach the conclusion that social security spending levels has positive effect on consumer spending.This paper has five chapters, Among them, the first chapter is the key section. The introduction states the concepts of social security, the purpose,theoretical and realistic significance of it, and current research at home and abroad. The first chapter is the theoretical analysis between social security level and consumer's expenses. This chapter states the relationship between social security and consumer spending from four aspects: residents life cycle retirement saving, the income distribution effects of consumer spending and saving behavior, preventive savings of residents, residents' disposable incomes and liquidity constraints. The second chapter is the empirical analysis between social security level and consumer's expenses. Introduce social security spending variable to the classic life cycle hypothesis consumption function of Modiglianli. The original consumption function is C_t=α+βY_t-1+γ1W_t-1, the current consumption function is Ct=α+βY_t-1+γ1W_t-1+γ2St. Ct is consumer spending, Y_t-1 is residents' disposable income, W_t-1 is the family's financial asset, St is social security spending levels. If we do linear regression with Eviews, we can have the conclusion that China's social security spending and consumer exist significant positive correlation. The third chapter discusses present situation of social security in China and the existing problems. According to China's realities, the fourth chapter puts forward some feasible countermeasures and suggestions to our country's social security system.