Influence of Population Structure Changes on the Stock Market
|School||Dongbei University of Finance|
|Keywords||Demographic Structure Stock Market Equity Asset Price Demographic Dividend OLG Model Life-Cycle Theory|
Increaseing in proportion of the old-age population and the degree of the population ageing process produce intermediate ageing effects on both the society and the econnomy, changes in demographic structure directly give rise to reactions between the financial markets and entity economy. This paper, based on the basic factors that affect the stock market-demographic factor, discusses the impact of demographic changes on the stock market. Mainly from two aspects:the first is the stock market fundamentals. Population structure affect the stock market fundamentals by affecting the socio-economic impact, mainly demographic dividend boosting economic development, which is conducive to the development of the stock market. The second is behavior of stock market investors. Based on the life-cycle hypothesis, the investors of different ages have different preferences for risk and investment income, middle age population is significantly reduced, the stock market will be under greater pressure. China is in a special population in transition with a lower level of economic development, but the population is rapidly aging. The study of this problem has important theoretical and practical significance.In this paper, the theoretical and empirical research methods are used. The theoretical part introduces the theory of conduction mechanisms of population structure impacting on the stock market, which is mainly basic on the life-cycle hypothesis, the fronts of the three theories of the demographic dividend theory and demographic iterative model. Life Cycle Hypothesis investor behavior, and demographic dividend through in turn have an impact on the stock market through affecting the economy, while the population of iterative model for our understanding of the relationship between population structure and assets to provide a simple and straightforward tool. Empirical part is that selects demographic changes in the United States, Japan, South Korea and South Africa data and national stock market data. Comparative analysis demonstrated a correlation of stock market price changes and demographic changes; national stock market investor behavior, investors quantity changes, investors shareholding change and investors average age was analyzed.The empirical results show that the close relationship between demographic changes and the stock market. The main conclusions are following:the savings population reduction in the proportion of the population, and then set to reduce significant negative effect on the stock market. Risk aversion in the elderly have strong will, when the younger generation population is significantly reduced compared to the elderly, the stock market will be exposed to a larger negative pressure elderly holdings decline; generally have the countries of the former less after multi-population structure have the downward trend in the average age of its stock market investors. Contrary to stock market investors, there is an upward trend in the average age of the country after more than a small population structure.. The future of the U.S. stock market in the medium term is expected to withstand the pressure from the baby boomers’retire, and Japan stock market will remain under pressure from the Japanese population in a drastic reduce the negative, and the Korean stock market inflection point occurs, and the stock market the future of South Africa will continue to be robust and growing.Contrast with foreign countries, the article analyzed pressure that China’s stock market facing. Due to the high-speed growth of the stock supply, prices rapid growth caused by Generation X and the baby boomers put into stock funds, demographic dividend window close brought the prices of factors of production, the slow development of the institutional investors, the pension system is not perfect and other reasons which caused a negative pressure on the Chinese stock market. The solution to the above problem is conducive to the healthy development of China’s stock market, and the weakening of the demographic dividend can improve the technical level of workers and vigorously develop high-tech industries to make up, namely, with a "bonus" to make up for the "demographic dividend".