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Study on the Impact of Pension Insurance on Household Consumption

In: Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)

Author

Listed:
  • Yifan Zhang

    (Northwest University, School of Economics and Management)

Abstract

Against the backdrop of China’s aging trend, the sound development of the pension insurance system is becoming increasingly crucial within the social security framework. It is noteworthy that the consumption rate among Chinese residents remains low, and there is substantial room for enhancing the role of consumption in driving economic growth. This paper takes the pension insurance system as a starting point to explore its impact mechanism on household consumption behavior, while systematically reviewing the developmental history of China’s pension insurance system. It combines the life cycle theory with the overlapping generation theory to analyze how pension insurance can improve household consumption propensity through the two dimensions of income effect and wealth effect. Furthermore, this paper discusses its impact from three dimensions: pension insurance type, security level and policy adjustment. This paper finds that urban employee pension insurance is more effective in stimulating consumption than urban and rural resident pension insurance by combining previous articles; improving pension levels helps to enhance consumption capacity, especially in the middle and low-income groups.

Suggested Citation

  • Yifan Zhang, 2025. "Study on the Impact of Pension Insurance on Household Consumption," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin (ed.), Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), pages 1389-1396, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-874-5_157
    DOI: 10.2991/978-94-6463-874-5_157
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