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The Frontiers of Society, Science and Technology, 2022, 4(6); doi: 10.25236/FSST.2022.040611.

An empirical study on the effect of child dependency ratio on household consumption—Focusing on the “two-child policy” from 2016

Author(s)

Feng Di1, Haozhong Yang2

Corresponding Author:
Feng Di
Affiliation(s)

1 Wuhan University, Wuhan, China

2 Northwest University, Xi’an, China

Abstract

With the new normal development model proposed, China is exploring a paradigm shift from investment-driven economic growth to domestic demand-driven economic growth. At the same time, in response to the aging process of the population, the Chinese government introduced a universal two-child policy in 2016. This paper analyses the impact of the two-child policy on the average propensity to consume in the household sector. In conclusion, the young-age dependency ratio inhibits the household's consumption, which is inconsistent with the implications of the life-cycle hypothesis. The reason is that Chinese families have a strong propensity to save, aiming for house purchasing and children’s education in the future. 

Keywords

two-child policy, population composition, life-cycle theory

Cite This Paper

Feng Di, Haozhong Yang. An empirical study on the effect of child dependency ratio on household consumption—Focusing on the “two-child policy” from 2016. The Frontiers of Society, Science and Technology (2022) Vol. 4, Issue 6: 68-73. https://doi.org/10.25236/FSST.2022.040611.

References

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