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Population aging, financial literacy and household consumption

Author

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  • Ma, Zhilong
  • Jiao, Ruoshui
  • DongZhi, CaiRang

Abstract

This study explores the relationship between population aging and household purchasing habits using the China Family Panel Studies (CFPS). This study demonstrates that population aging has a statistically significant positive effect on household consumption spending. The findings indicate that this link functions mainly through improving financial literacy, a vital mediating factor. As individuals age, households demonstrate heightened utilization of financial planning instruments and risk management measures, resulting in more effective resource allocation in healthcare, retirement solutions, and intergenerational asset transfer mechanisms. The findings contest traditional beliefs regarding the stagnation of consumption in aging countries by emphasizing the adaptive financial capacities that arise in reaction to demographic changes. These insights facilitate the reconfiguration of age-related economic policies, underscoring the necessity of specialized financial education initiatives to enhance the consumption-boosting impacts of population aging. The research offers empirical evidence for enhancing household welfare in swiftly aging economies.

Suggested Citation

  • Ma, Zhilong & Jiao, Ruoshui & DongZhi, CaiRang, 2025. "Population aging, financial literacy and household consumption," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325012346
    DOI: 10.1016/j.frl.2025.107976
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