Abstract: This article uses data from Chinese General Social Survey(CGSS)in 2010 to test the consumption effect of pension insurance. After dividing the self-section through Propensity Score Matching(PSM), we analyze the relationship between pension insurance and household consumptions. Results show strong evidence of consumption effect of pension insurance. People who have pension insurance also spend more on some items(e.g. Food, clothes and house). However, we also find the negative evidence between both on several items. The consumption effects on some items are different between urban residents and rural residents.