An Empirical Study On The Effects Of Age Structure On Consumption In Japan

Consumption has always been the focus of economic research.With the emergence of the life cycle consumption theory of Modigliani,the demographic age structure has become one of the factors that affect consumption.Especially now,as the proportion of the world's elderly population to the total population continues to increase,many countries have stepped into the aged society,the effect of the demographic age structure on consumption becomes more and more prominent.This paper takes Japan who has the highest degree of aging in the world as its object,to examine the changes in the age structure of the Japanese population and its impact on consumption amount and marginal propensity to consume.This research has great significance for China,which has just stepped into the aged society in 2002.After systematically presenting various consumption theories,studying the existing literatures on the factors influencing consumption,this paper summarizes the factors that affect consumption as follows : economic factors,institutional factors,demographic factors and environmental psychological factors.On the basis theories of consumption,this paper makes a qualitative analysis of the changes in the age structure of the Japanese population and consumption,describes the changes of the amount and structure of Japanese population from 1944 to 2015,and explains the changes of the total consumption expenditure,per capita real consumption and consumption rate.At the same time,this paper makes a preliminary forecast of the relation between the various indicators of the demographic age structure and consumption amount and consumption rate.This paper constructs a vector autoregressive model(VAR),using index of Japanese population age structure and consumption from 1980 to 2015.With the use of impulse response function and variance decomposition method,this paper explores the extent and direction of the impact of the changes in the proportion of the three-stage population on the per capita real consumption and consumption rate.Studies have shown that changes in the demographic structure do have an impact on consumption: the increase of young dependency ratio will curb the growth of per capita real consumption,while the elder dependency ratio and labor proportion will promote the growth of per capita consumption;The impact of the young dependency ratio on the consumption rate is uncertainty,the elder dependency ratio and the proportion of labor have positive and negative impact on consumption rate respectively.In addition to the impact of consumption itself,the per capita real GDP is the most important factor affecting per capita consumption in the short term,while in the long term is the young dependency ratio.The most important factor affecting the consumption rate is the per capita real GDP both in the short and long term.In the long run,the proportion of young people has a greater impact on consumption than the proportion of the elder population.Based on the research results above,this paper makes some suggestions for China to respond to and make good use of its aged society in terms of economic policy formulation,pension policy development and industrial structure adjustment.