The Effect Of Social Security On Household Savings

The social security system of the China was not established until the1980s and we have abtained a lot of fruits. However, there’re still some problems. Multi-level, non-universal and low level of protection features prominent. At the same time, high savings and consumption of residents of malaise seriously restricting China’s economic development, how to stimulate consumer spending and reduce its strong willingness to save is a major problem to be solved. According to some research, among the factors that affect household savings, the relationship between social security and saving is most close.Most of the household savings for precautionary saving behavior pension, health care, children’s education, which is the dominant pension, medical items, we can see that China’s social security system is not perfect so that residents of long-term savings remained at a high level, so that weakens the consumption. With the increase in social security expenditure, how its impact differ between the urban and rural residents to save is the focus of this study.In this study, we take a combination of methods the theoretical and empirical analysis. In theoretical analysis, we introduce the theory of life cycle, the theory of redistribution and social security savings related theories.In empirical analysis, the main effects of social security on household savings from the level of social security and social protection coverage are taken into consideration.31provinces and cities nationwide cross-sectional data in2011is selected, the amount of savings per capita of urban and rural residents of explanatory variables to the initial distribution of income (including wage income, business income, property income), the secondary distribution income (income transfers), social security coverage, health education spending accounted for explanatory variables to model, horizontal comparative analysis of2005data also selected to do longitudinal comparative analysis.The results showed that:From the vertical comparison, social security coverage is an important factor affecting household savings, the level of social security income has increased uncertainty and lower expectations of future residents of the dual role. When the lack of social security coverage, and its impact on household savings is not obvious, the level of protection for residents’ savings generated strong crowding-out effect. With the improvement of security coverage, which is expected to reduce the role of resident uncertainty is gradually emerging, At this level of protection is mainly serve to increase the income effect. From the comparison, urban and rural social security for urban residents’ savings have to squeeze into effect on rural household savings has crowding-out effect, but crowding is still relatively small, so in general terms, the government tried to increase pay by increasing the transfer of residents thereby reducing the consumption of household savings practices did not achieve satisfactory results.