Abstract: This paper is aimed to explore the relationship between fiscal livelihood expenditure and household consumption. Based on the analysis of Chinese consumers' characteristics,this paper establishes a theoretical model to analyze the effect of fiscal livelihood expenditure on household consumption under the background of urbanization and population aging. This paper also performs a regression analysis of the provincial level panel data from 2006 to 2014,employing the dynamic Generalized Method of Moments(GMM). The empirical result reveals a negative influence,which means that the increase of fiscal livelihood expenditure has led to decrease of both per capita actual consumption expenditure and household consumption rate. The results are explained in terms of improvement of consumption hierarchy and increasing uncertainty expectation. Accordingly,this paper puts forward that only when financial livelihood expenditure improves coverage to reduce uncertainty expectation,and matches consumption enhancement,should the fiscal livelihood expenditure have a positive impact on household consumption.