The Impact Of Population Aging On Government Debt Risk

From the process of development, population aging is one of the major problems that anational development must face. In1865, France was the first to the aging of the population.In2009, the European sovereign debt crisis for us is further to see the impact of the agingpopulation. Since the last century, some developing countries is also into a trap of agingpopulation. In our country, this phenomenon also exists: the elderly population is large, laborforce is less. Theoretically, the population aging and government debt risk does exist a certainconnection, many literatures have argument, but the empirical study of population aging andgovernment debt risk does not sparse. In view of this, the paper is based on the data of20developed countries as sample, establish dynamic panel data model, study the influence ofpopulation aging on government debt risk.This article analysis from economic growth, the government budget, hidden debts of anaging population, pension system, the influence of population aging on economic growth hasbeen clear, at the same time, an aging population will expand fiscal spending and increase therecessive debt, and affect the existing pension system. The paper analysis the causes ofpopulation aging, the present situation and situation of the government debt risk in developedcountries, and it introduces an aging population’s impact on the government debt risk fromtwo aspects of economic growth and fiscal expenditure. In terms of economic growth, usingSolow Model to analyze the influence of population aging factors on the economy; In termsof fiscal spending, mainly analysis from the endowment spending and medical spendingproblems.This paper is based on the theory of classical debt service model,and build thegovernment fiscal spending and income for debt repayment model. Government debt risk ismainly affected by inflation, economic growth, interest rates, an aging population,unemployment, interest payments and the influence of factors such as the banking crisis. Thisarticle uses the central government’s total debt as a share of GDP as a measure of thegovernment debt risk index, selects the first-order lag dynamic panel data model, and selectsof net government debt as a share of GDP, the total amount of government debt as a share ofGDP as a dependent variable for robustness test.The results show that:65year old population and the aging population bring-up ratio aresignificantly influence on government debt risk, and symbols is positive, namely an agingpopulation will significantly increase the risk of government debt. Population aging is higher,the government debt risk is higher; Lower economic growth and the banking crisis that it willincrease the government debt risks; Rising unemployment caused by the unemployment insurance and other spending increases and the increase of debt interest payments will risegovernment debt, increase debt risk.Therefore, according to the empirical results, this paper puts forward the reform of thepension system, improve the legal and emeritus age, moderate fertility, give birth allowance,control the scale of the debt and some proposals of reasonable.