TITLE:
Research on Effects of Basic Pension Scheme on Household Debt Behavior
AUTHORS:
Shengyun Yan
KEYWORDS:
Basic Pension Scheme, Household Debt, Degree of Debt, CFPS
JOURNAL NAME:
Modern Economy,
Vol.10 No.3,
March
25,
2019
ABSTRACT: The current scale of debt of Chinese families has
expanded rapidly in recent years. This
article discusses the macro factors influencing household debt-basic pension
insurance and verifies their relationship. Based on the micro-data of the 2014 China Family Tracking Survey, this
paper analyzes the impact of China’s basic endowment insurance on household
debt behavior. Using Tobit model regression, it is found that the basic pension
insurance has significant positive effects on household debt level under the
overall sample. Further sub-sample research on the heterogeneity
characteristics of families shows, the positive correlation between basic
pension insurance and household debt ratio exists in rural households and
high-income families. At last, the above conclusions were confirmed by IV-Tobit
regression using the average contribution rate and the institutional dependency
ratio of the province where the family is located as an instrumental variable.
This shows that although the increase in social security coverage has enhanced
the family’s ability to counter risk, it also needs to prevent the negative
externalities brought about by excessive debt of residents.