Research On The Influence Of Delayed Retirement And Financial Subsidy Pension Fund On Residents’ Consumption

Consumption is the "ballast" and "stabilizer" to maintain the stable operation of the economy,and stimulating consumption and expanding domestic demand is the key hand to promote the domestic cycle in the future.In order to cope with the possible negative impact of the aging population on the economy,China has proposed a gradual delayed retirement policy to effectively alleviate the labor shortage,enhance the sustainability of pension accounts,improve income in old age,and have an impact on residents’ consumption.In recent years,China has emphasized the construction of public service system to make the improvement of people’s livelihood resonate with economic development.The Social Insurance Law stipulates that the government has the responsibility to subsidize the pension insurance fund,and the government’s financial subsidy is an important means to improve people’s livelihood,regulate income distribution and promote social equity,which has an obvious impact on consumption.Influenced by traditional Confucian culture,it is common for Chinese residents to leave inheritance to the next generation,which will also have an important impact on consumption.Based on this,this paper argues that it is necessary to establish the relationship between delayed retirement,financially subsidized pension funds and residents’ consumption on the basis of the inheritance motive and analyze the mechanism of the impact.This paper compiles the existing literature and constructs a two-period,three-sector intergenerational model based on life-cycle theory and fund balance theory,in which individuals go through two periods of adulthood and old age in their lifetime,involving the behaviors of individuals,enterprises,and the government,and introduces delayed retirement,fiscally subsidized pension insurance funds,and inheritance,under the conditions of individual utility maximization,enterprise profit maximization,and labor and capital market equilibrium The equilibrium solution is obtained under the conditions of individual utility maximization,firm profit maximization,and labor and capital market equilibrium,and values are assigned to the parameters.The findings suggest,first,that delaying retirement increases consumption in young adulthood and consumption in old age.Specifically,under this paper’s framework and parameter values,the positive effects of delayed retirement through lower savings and more inheritance outweigh the negative effects of lower labor-average capital and lower wage income due to changes in labor force structure for youth consumption;for old-age consumption,the positive effects of delayed retirement through increased savings principal and interest,pension income,and old-age wage income outweigh the negative effects of increased inheritance gifts.The negative impact of delayed retirement through increased savings principal and interest,pension income,and old-age wage income is greater than the negative impact of increased estate gifts.Second,financially subsidized pension funds reduce consumption in young adulthood and increase consumption in old age.Specifically,under the framework and parameter values in this paper,the positive effect of financial subsidized pension insurance funds through reduced savings and more inheritance is smaller than the negative effect of reduced returns to capital and lower wages due to the reduced proportion of economic construction inputs for youth consumption;for old-age consumption,the positive effect of financial subsidized pension insurance funds through increased old-age income is larger than the negative effect of increased inheritance The negative effect generated by an increase in gifts.In summary,in order to better stimulate consumption,the following suggestions are made: First,it is necessary to develop the silver-haired economy in the context of population aging,to seize the elderly as a consumer group,and to expand multiple consumption channels.Second,increase the capital accumulation in the economy to further improve the consumption level.For example,financial subsidies,improving international perspective,etc.Third,to establish policies that help to increase the consumption of young people and set a minimum consumption guarantee mechanism to avoid the implementation of policies that have too much negative impact on the consumption of young people.