Empirical Research Of The Relationship Between Expenditure For Social Security And Consumption Expenditures

Along with the enacting of the 12th Five-Year Plan, our economics structure strategical adjustment is formal pulled open prelusive. In the future, our economy growth is depend on consumption,investment and export. And civilian rich is one of the main targets of our development. As a main role to promoting our economy growth, it hasn't made remarkable impact at present. Meanwhile, the incomplete social security system is one of the restrictive factors for the increase of domestic consumption.The paper focuses on the influence of social security to domestic consumption by empirical analysis combined with theoretical analysis. With domestic data, we analyse the influence mechanism and approach of social security to consumption, and describe the situation of the two variables, for example by comparing them with other countries.Based on the Duesenberry's consumption theory, we use co-integration and error correction model to explore the relationship between social security and consumption. The result shows that social security could promote consumption for a long time, but the long equilibrium among consumption,income and social security make a negative impact to consumption. Meanwhile, pension and retiree system are beneficial to improve consumption.By using panel data of 31 provinces and cities from 1998 to 2009, we establish the fixed effects panel data model. The result shows that the coefficients of social security for each province are between 0.02 and 0.14, and social security of those provinces in North China,East China and northeast of China have better effects to consumption. But the influence is not in direct proportion to the level economic development.Finally, we give some policy suggestions from three aspects. In a word, social security has profound meaning to the improvement of the quality of life and the stability of economic and social. Consummate the social security system is imperative.