Contemporary Research Analysis Journal

Against the backdrop of rapid population aging in China, pension finance—the institutional link between old-age security and capital markets—has drawn increasing attention as a potential driver of household consumption. Using municipal and provincial panel data for Guangdong, Guangxi, and Hainan in South China over the period 2014–2023, this paper employs two-way fixed-effects models, supplemented by province-specific time-series regressions, lagged-core-variable tests, and robustness checks that exclude the pandemic years, to examine the impact of pension finance on both the scale and the structure of urban household consumption. The results show that, first, at the aggregate level, neither the basic pension insurance coverage rate nor enterprise annuity assets exert a significant effect on total urban household consumption, indicating that pension finance has limited capacity to expand aggregate consumption. Second, at the structural level, a one-percentage-point increase in the basic pension insurance coverage rate reduces subsistence consumption by approximately RMB 149.81 and increases development-oriented consumption by approximately RMB 101.35, implying that the principal role of pension finance lies in promoting consumption-structure upgrading. Third, enterprise annuity assets have a positive but not fully robust effect on development-oriented consumption, emerging mainly in non-pandemic years or under looser specifications. Overall, pension finance in South China mainly optimizes the consumption structure rather than expanding aggregate consumption, and the first pillar plays a stronger role than the second pillar.

pension finance, urban household consumption, consumption-structure upgrading, South China

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