A Study Of The Effects Of Population Age Structure On The Consumption Rate

Based on the OLG model, considered Chinese residents’ bequest motives, this paper sets up two3-periods Overlapping-generation models:one whose after-tax wage rate is considered as" naive expectation", the other one whose after-tax wage rate is considered as" reason expectation", this paper analyses the impact of demographic structure on consumption, the results from these models show that: youth dependency ratio have a positive impact on household consumption rate, old dependency ratio have a positive impact on household consumption rate, meanwhile income growth ratio have a positive impact on household consumption rate.Then, with a collection of the provincial panel date from1995-2009, this paper sets up regional division (Eastern, central, Western), urban and rural division fixed-effect panel data models, and compares empirical results of various estimation methods(No weights, Cross section weights, Cross section SUR).Samples of the consumption of rural residents in the eastern, central, western models, income growth ratio have a positive impact on rural household consumption rate, through a test of significance in the1%level of significance. Youth dependency ratio have a positive impact on rural household consumption rate, and in the1%level of significance. However, old dependency ratio have a negative impact on rural household consumption rate only in the eastern sample model. The reason, the aging process of central and western rural are growing faster than eastern rural. As a result, the larger percentage of the youth ratio of western rural, the stronger of the precautionary saving motive. Accordingly, old dependency ratio have a strong negative impact on rural household consumption rate.Samples of the consumption of urban residents in the eastern, central, western models, income growth ratio have no significant impact on urban household consumption rate. City youth dependency ratio have a positive impact on urban household consumption rate, through a test of significance in the1%level of significance. Town youth dependency ratio have a positive impact on urban household consumption rate, through a test of significance in the10%level of significance. City old dependency ratio has a significant negative impact on rural household consumption rate. Town old dependency ratio have a negative impact on rural household consumption rate (Samples of western excluded). The reason. Eastern urban areas bequest motive is the strongest, followed by central, western weakest. Accordingly, old dependency ratio have strongest negative impact on household consumption rate in the eastern urban areas.In order to effectively improve the rate of consumption of the various regions of China residents, the eastern, central and western regions residents income gap between urban and rural residents’ income gap should be reduced, speeding up the reform of the social security system, to effectively reduce the uncertainty of future revenue, weaken the prevention of the residents’precautionary saving motive. Levying heritage tax is an effective means to regulate the distribution of wealth, heritage tax threshold can be raised, or the introduction of a progressive inheritance tax levy of heritage tax. In addition, it is considered appropriate to relax the family planning policy, improve the youth dependency ratio, thereby increasing the ratio of consumption to GDP.