Empirical Analysis On Social Security For Rural Residents’ Consumption In Different Provinces Of China

Consumption is the driving force of all countries including China.With the slow development of the world economy and China’s economic expectation decreases, how to increase the consumptions of citizens becomes the goal of our economy policy and macro control.Final consumption expenditure has contributed the least to our GDP in the past ten years. The consumption expenditure of farmers is 3 times less than the average of national consumption. Farmers’ consuming desires are weak and the consumption rate decreases. Many researches agree that the reasons are as follows:our citizens are conservative about consumption. As for farmers, the main reason is that the imperfection of social security brings uncertainty to their future life.Compared with the citizens who live in towns and cities, the social security of farmers has lower level and less kinds and narrower converge. Nowadays, our government attaches great importance to this problem.This thesis is based on Feldstein Model and analyzes the figures of the 28 provinces from 2004-2013.It analyzes the influence of social security on the consumption by researching the rate of social security and the level of social security respectively because the two factors function differently. The income of social security works by supporting farmers’ consumption. The participation of social security works by reducing the risk.The research indicates that the income is the biggest factor of consumption not only for the whole country but also the different areas. The west area should increase the income of citizens which is the priority. The middle area should increase fiscal expenditure to let more people enjoy the social security. As for the east area, it should increase the participation of social security of farmers.