Research on Effects of Basic Pension Scheme on Household Debt Behavior

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.