A Study On The Influence And Its Paths Of Population Aging On Local Government Debt

The rapid aging of China’s population has created a host of economic problems.With the deepening of the aging degree,the government’s social security expenditure,public infrastructure services and other higher requirements,need the government to invest more funds,and at the same time,crowded out the resources that should be invested in productive expenditure.The aging of the population makes the local government’s fiscal expenditure continue to increase,and the decrease of labor participation rate will also reduce the potential economic growth rate,weaken the ability of local fiscal revenue absorption,and further increase the financial pressure.Therefore,this paper,starting from the economic problems derived from aging,analyzes its impact on local government debt,and analyzes the mechanism of action,and puts forward new ideas for local government debt management.The research content of this paper is mainly divided into the following parts:First,the domestic and foreign literature on aging,local government debt and the impact of aging on local government debt is sorted out.Based on the existing research results,a hypothesis about the impact path of aging on local government debt is proposed.Secondly,the benchmark regression and robustness test of the related equations of the impact of aging on local government debt are carried out,and the endogenous problem is eliminated by the 2SLS method.Based on the problems of regional imbalance in China’s aging population and local government debt,regional heterogeneity is analyzed according to the eastern,central and western regions.Thirdly,the mediating effect model is used to test the hypothesis of the influence path of aging on local government debt.The research results show that: First,aging has a positive impact on local government debt and the degree of impact decreases in the central,western and eastern regions;Second,aging aggravates the debt risk of local governments by reducing the economic growth rate and improving the soundness of social security,and with the aggravation of aging,the impact is more prominent.Third,the level of economic development has a positive impact on local government debt,and the degree of impact decreases in the central,western and eastern regions.Fourth,government competition has a positive impact on local government debt,and the degree of impact decreases in the eastern,central and western regions.Finally,according to the empirical results,the following policy recommendations are put forward:First,foster new economic growth points by developing aging industry and boost economic development by utilizing the resources of the elderly population;Second,we should improve the financial input system for social security and encourage the participation of social capital and forces.Third,we need to accelerate the transformation of our economic development philosophy and avoid blindly borrowing money.Fourth,build a complete industrial chain to enhance the strength of the real economy;Fifth,,optimize the assessment standards for local officials and introduce the assessment of local government debt management into the performance assessment.