The Effect Of Age Structure On China Social Saving

As an important issue of macroeconomics,saving involves all aspects of the economic system,and it itself is an important research field.Especially,when our nation faces the "problem of ageing" and co-existing problem that saving takes up a huge portion of GDP,it is of great value to research the effect of age structure on saving.From a global perspective,the saving rate has a trend of declining in recent 10 years,while the saving rate of china has kept relatively stable at a high level.Ever since 2000,the saving rate has become the highest in the whole world.After 2000,the rate kept rising and in 2004,it reached 49%of GDP,in 2007 the figure is 50%. According to the latest statistics data,the total amount of saving in China has raised from 712 billion Yuan in 1990 to 16,158.7 billion Yuan in 2006,a huge rise of more than 200%.From the viewpoint of whole society,especially from the point of residents and families,we should pay more attention to the effect of age structure on saving. Relative research comes to the conclusion that ever since 1998,China has entered the door of aging society.After that year,the Total Dependency Ratio kept on rising and reached 46.40%in 2005.As the arriving of aging society,the effects of aging and other factors on China's saving draw the attention of many researchers.This thesis employs panel data analysis method to estimate data of provincial level from 1990 to 2006 in china to reckon the effects of age structure(the Dependency Ratio of Children and the Dependency Ratio of the Aged) on social saving.From the empirical research we find:the Dependency Ratio of Children only has slightly minus effect on social saving,although this effect is not significant;the Dependency Ratio of the Aged has significant effect on social saving but the figure is relatively small.This result is controversy to LCH theory,and is different from most researches.Besides,this research also finds that income per capita has significant positive effect on social saving.There is Intercept item in this model,which passes the 1%significant test,which indicates there is obvious spontaneous saving in china.In this thesis,we find the change in Dependency Ratio of Children could not explain the change of social saving in china,even if the change in Dependency Ratio of Children resulted in by China's population policy could only has limited effects.To a certain extent the Dependency Ratio of the Aged affects social saving,although it is not very significant so far.From the analysis we can conclude that the as time pass by,the Dependency Ratio of the Aged would gradually increase along with the decrease of elderly mortality and the prolonged life expectancy,and will affect the total social saving amount.Compared to existing literature,this thesis introduces age structure variable into LCH theory and estimates the econometric model after computing the effects of age structure and income on saving.Besides,in this thesis we carry out the empirical analysis with panel data analysis method,which is of great advantages compared to Mathematical Modeling.There are some drawbacks in the thesis,first,we didn't compare the effects of regional difference,neither did we take these variables into the model,and second,we didn't introduce Phase Diagram Analysis to estimate the relation between the fixed variables and the dependent variable.So these problems are the further research field in the future.