Impact Of Labor Supply Shocks On Consumption

By contrast to the rapid growth of the economy in China, the labor supply imbalance and the consumer downturn phenomenon has occurred in our daily life. Residents to work are just to get the consumption, so how does the labor supply shocks impact the consumption of Chinese residents?This paper starts with the intention of writing, spirit of the basic theory, is expounded the necessity and significance of research on this problem. After reviewing the Chinese and foreign scholars on the research of labor supply and consumption, I summarize the views and analysis method of the most inspired. Since the reform and opening up the relevant data selected macroeconomic variables in China are summarized, the paper systematically summarizes the labor market of our country and the consumer characteristic facts. While making two connection judgments, I use search theory and regression model for tentative interpretation, by adopting the method of dynamic stochastic general equilibrium to establish real business cycle model including labor supply shock, by using the method of parameter calibration of the logarithmic linearization to simplify the model. By data fitting results, it proves that my tentative explanation and the establishment of model is correct, the labor supply shock in addition to its influence on household consumption through the system, technology and other channels indirectly affect consumption. Finally, based on the impulse response function of labor supply shock, I portray that the labor supply shocks on consumption and technology has a negative impact, but the impact on consumption is positive, this also confirms my conjecture, reflects the characteristics of Chinese economic system in the transition period.At the end of this paper, based on the search theory and the results of dynamic stochastic general equilibrium model of the measurement, the suggestions are made to comment on how to improve the labor market structure and improve the consumption policy recommendations.