The Promoting Effect of Government Transfer Payments on the Consumption Upgrade Rate

Consumption upgrade is not only an important engine of economic growth, but also a crucial way to achieve high-quality economic development, improve people's livelihoods, and promote sustainable development. This paper uses the panel data of the China Family Panel Studies (CFPS) from 2020 to 2022 to deeply explore the impact of transfer payments on consumption upgrade at the household level, and analyzes its heterogeneous effects under different marital statuses, health conditions, and regions. The research results show that: (1) The benchmark regression indicates that government transfer payments significantly promote household consumption upgrade, and this conclusion remains valid after dealing with endogeneity and conducting robustness tests. (2) The heterogeneity analysis reveals that the promoting effect of government transfer payments on consumption upgrade is particularly significant in unmarried households, households with good health conditions of family members, and households in the central and western regions. (3) The mechanism analysis shows that government transfer payments promote consumption upgrade through two paths: increasing pension income and enhancing family responsibility. The former provides a stable economic guarantee for households, reducing the need for precautionary savings, while the latter prompts households to be more inclined to make long-term plans and increase spending on development-oriented and enjoyment-oriented consumption. This research not only reveals the multi-dimensional impact mechanism of government transfer payments on consumption upgrade, but also provides important empirical evidence and policy implications for optimizing government transfer payment strategies and promoting the upgrading of the consumption structure.