Research On The Influence Of China’s Endowment Insurance On Household Consumption

With the rapid development of Chinese economy, the Chinese saving rate remains high and consumption continues to decline. The domestic “high saving, low consumption” characteristic seriously affects the development of the economic structure. To change the current "high saving, low consumption" phenomenon in China, we need to study the issue from the two aspects of consumption and saving motivation. Endowment insurance, as the most important part of social security system, will affect the income expectation in the whole life cycle, thus weaken precautionary motivation. The study on the impact of endowment insurance on consumption can provide reference value for the improvement of endowment insurance system and the expansion of residents’ consumption.In this paper, the latest data released by China Health and Retirement Longitudinal Study(CHARLS) is used to analyze the relationship between endowment insurance and consumption. At the same time, it also distinguishes several representative consumption items to further study the impact of endowment insurance on the consumption structure. By OLS regression, we finds that in the whole sample, after controlling the demographic variables and income, holding endowment insurance has a significant positive affection on total household consumption, food consumption, and clothing consumption. The consumption on high level demand, such as education and health care, is less significant. Due to the difference of consumption habits, price of goods, insurance amount and rates between rural and urban residents, the total sample is further subdivided into rural and urban research groups to more accurately assess the effects of endowment insurance on consumption. The regression results show that results of urban sample are basically same with the full sample, but in rural sample, there is no significant relationship between endowment insurance and consumption, which highlights two problems of endowment insurance in China at present: one is the insufficient security, and the other is the huge gap between urban and rural areas. At last, the paper puts forward policy suggestions from the perspective of the generality, individuality and guarantee level of endowment insurance.