China's Population Age Structure To Research On The Effects Of Household Savings

Based on the theory of Life Cycle Hypothesis (LCH), this thesis aims to research into the effect of demographic structure change on the household saving from both macro and micro perspectives, and testify the adaptability of LCH in China at the same time. Initially, by using China’s1953-2010time series annual data, this thesis set a steady vector error correction (VEC) model. It concludes that household saving rate co-integrated with demographic structure in the long term, which accords with LCH; Besides, the influence of demographic structure change on household saving is greater than which of income growth. Then, by using the survey data of2002Chinese Household Income Project, this thesis conducts a regression analysis in the influence of the age of household head on household saving. The conclusions are different between the urban and rural household:There is significant positive correlation between the age of rural household head and household saving, while there is no significant correlation in its rural counterparts, which does not in accord with LCH. In the last part, based on the macro and micro empirical tests in the previous two parts, we remove some presumptions with which China is not in conformity in order to further explain the results of regression for Chinese urban and rural household saving. Therefore, the factor of sociai security system, bequest motive, uncertainty and liquidity constraint are added into the traditional LCH to explore a more persuasive theoretical explanation of the effect of demographic structure change on the life cycle saving in China.