The Impact Of Population Aging On China’s Consumption Of Urban Residents

The aging of population and insufficient consumption are two problems in China’s economy.In 2000,the population of 65 and over the age of 65 in China was more than 7% for the first time,and according to the standard set by UN,China is officially an aging society.Since then,China’s aging population has been accelerating.By 2016,the number of people over 65 years old had exceeded 150 million,accounting for 10.8% of the total population.At the same time,the consumption has always been inadequate,which restricts the further development of China’s economy.Residents are the main body of consumption,and the change of age structure of residents has certain influence on residents’ consumption.So,this paper chose to analyze the impact of the change of population age structure on the consumption of urban residents from the perspective of population aging.This can help us to deepen the theory of relationship between population age structure and household consumption,and to solve the problem of inadequate household consumption at present in China.In the theoretical part,this paper firstly introduces the concept,indicators and causes of aging of population.After that,it sorts out the western consumption function theory such as Absolut Income Hypothesis and Relative income Hypothesis,as well as Marx’s consumption power and consumption credit theory,and summarizes the factors affecting resident’s consumption.Finally,combined with the factors affecting residents’ consumption and the impact of aging of population on individual residents and the whole population,this paper analyzes the ways that aging population affects residents’ consumption.It is found that aging of population affects residents’ consumption from two aspects: on individual side,the aging of population will change the income and consumption tendency of individuals,and then affect the consumption of residents;on the whole,population aging will affect the absolute productivity of society and the distribution of total social products,and ultimately affect the consumption of residents.After theoretical analysis,this paper analyzes the impact of China’s aging of population on urban residents’ consumption.In this part,it firstly introduces the aging of China’s urban population development process and characteristics;secondly,it specifically analyses the income and consumption of urban elderly population in China based on relevant statistical data;finally,on the basis of theoretical analysis,it concretely analyzes the impact of aging of population on urban residents in China according to the characteristics of urban population aging and the income and consumption of urban elderly population.Through specific analysis,it is found that China’s aging of population has a negative impact on the consumption of urban residents,which is reflected in the following aspects: on individual side,the income and consumption tendency of urban residents in China will decline in the old age,eventually leading to the decrease of their consumption ability;on the whole,the aging of population will reduce the absolute productivity of urban society,expand the income inequality between urban population and compress the income of labor force population,thus reducing the overall consumption ability of urban residents.Finally,this paper goes into the empirical analysis section.In this section,based on Life-Cycle Hypothesis this paper constructed the two-stage OLG Models containing APC and the population age structure.Using the 1991-2016 data,this paper evaluates the influence of aging of the population on consumption.The empirical analysis shows that the aging population has a significant negative impact on the consumption of urban residents.According to the conclusion of theoretical analysis and empirical analysis,this paper proposes to improve the negative impact of population aging on urban residents’ consumption from the following points: first,to develop products for the elderly and improve their propensity to consume;second,to improve the old-age security system,expand the coverage of old-age insurance and improve the fairness of old-age insurance;third,to increase the sources of old-age funds and reduce the burden of young people’s old-age insurance.