Research On The Impact Of Population Aging On Stock Price In China

Population structure change is the process that most countries will face.And developed countries first experienced population aging.At present,China is at a stageof deepening aging with "getting old before getting rich".China's population aging shows some obvious characteristics such as fast speed,large scale,declining birthrate and miniaturization of family structure.The increase in the elderly population directly affects the number of laborers,and indirectly affects many production factors such as capital,savings,technological progress and human capital investment.Then it will have a huge impact on our economy.As an important part of the financial market,the stock market is a barometer of macroeconomics.Moreover,it can provide "fresh blood" and inexhaustible motivation for the development of industrial enterprises.Therefore,researches on how population aging affects stock prices can help to build a more effective capital pricing system as well as improve financial products supply.This paper studies the impact of population aging on stock prices from both theoretical and empirical perspectives.At the theoretical level,this paper bases on life cycle theory and supply-demand theory.It analyzes the internal influence mechanisms between the two from three aspects of the quantity and quality of labor supply,household savings and investment behavior.Through theory analysis,it is predicted that the stock price will change in the opposite direction with the aging.At the empirical level,on the one hand,using vector autoregression(VAR)method regresses China's 27-year time series data to explore their relationships.At the same time,regressing 16-year international balanced dynamic panel data of 35 countries for verification and comparison by the system GMM method.The international panel covers 35 countries,which have higher levels of development and aging.The empirical conclusions have a reference and forecast effect for China's aging and stock issues.We can refer to the conclusions of international data and conduct pre-prevention and policy adjustments to avoid or mitigate the negative effects of population aging.On the other hand,the proportion of age groups are used as explanatory variables,including elderly dependency ratio,child dependency ratio and total dependency ratio.These indicators can reflect the unique ageing trends such as low birthrate and aging in China,and help to explore the contribution rate of old-age support burden and children's support burden on the stock price changes.Through the literature review,facts analysis and empirical tests,this paper believes that China's population aging does have a negative impact on stock prices.Detailed conclusions are as follows.First,the impact of aging on the stock market depends mainly on the relative proportion of the elderly population and the labor force,rather than the absolute number of elderly population.And the contribution rate to the volatility of stock price changes is getting higher and higher.This reflects that the labor force plays an important role for economic and financial development.Second,the aging of China's population has led individuals and families to reduce their demand for stocks.Because the probability of residents investing in risky assets varies with age,which is inverted U-shaped distribution.The higher the degree of aging within the family is,the more conservative the behavior of residents will be.Third,the effect of China's household savings on the stock market is not obvious.There may be issues such as crowing-out effect of real estate investment and poor financing channels.These make it less efficient for the transformation of household savings into securities and industrial investments.Finally,according to the empirical results of international data,the increase of children's support burden will enhance the negative impact of population aging on stock prices with ageing deepening.Based on the above findings,this paper proposes the following policy suggestions.First,rationally formulate birth policies to improve the population structure.Secondly,change the mode of production and promote the upgrading of industrial structure.Third,pay attention to human capital investment to increase effective labor output.Forth,improve pension and medical security systems and consider the listing of pension funds.Finally,continue to deepen financial reforms and encourage financial innovation.