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

The aging population will affect all aspects of the economic and social development.The aging population,not only affects the public service,payment of pension,labor supply which is associated with old age,but also affects stock price and stability of financial market which is a mountainous challenge.Population structure change is the process that most countries will face.And developed countries first experienced population aging.At present,our country is facing a deepening aging population,and it 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,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.That must have a bearing on our financial market in the future which should attract enough attention from policy makers.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,firstly,this paper uses ADF test,Lasso-based variable selection and Johansen cointegration test to test the 28-year series data of China,in order to explore the correlation between population aging and stock price.Then,it carries out EG cointegration test on the role path of population aging in influencing stock price through labor and savings perspectives respectively.And it explained the role of population aging in affecting stock prices through investment angle by citing the existing literature,in order to explore the underlying mechanism of the impact of aging population on stock price in China.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,from the perspective of labor,the path of population aging to the stock market is mainly achieved through the channel of labor quality,but the effect of the labor force channel is not significant.Probably because the absolute amount of labor supply in China is sufficient,the effect has not yet appeared.Second,from the perspective of savings,aging population has led to a decline in household savings,which has a negative impact on the stock market.Third,the aging population has led individuals and families to reduce their demand for stocks.Because the probabilily 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.Finally,based on the impact mechanism of population aging on stock price,this paper puts forward policy recommendations to promote the balanced and stable development of Chinese financial market.First,rationally formulate birth policies to improve the population structure.Second,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.