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The distributional effects of public pension reform in urban China

Author

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  • HE Lixin

    (Graduate School of Economics, Hitotsubashi University, Tokyo, Japan)

Abstract

Using the micro data of Urban Household Survey made by the National Bureau of Statistics of China(NBS) in 2002, this paper studies quantitatively the distributional effects of Public Pension Reform in urban China, from intragenerational and intergenerational perspectives, by measuring lifetime net benefits that urban employees obtain under the public pension system in 1997 and the newest one announced in December 2005, respectively. The results indicate that the regressive income transfer existing before implementation of the reform is improved as a consequence of the 1997 reform. However, the Act of 2005 Reform generates the obvious inclination of the regressive income transfer among people who exceed 40 years old in 2002. On the other hand, from the viewpoint of intergenerational distribution, the intergenerational inequality resulted from 1997 reform is greater than that from 2005 reform. Moreover, all generations would receive higher lifetime net benefits under the Act of 2005 Reform, but it must be based on sustainable pension system and participants¡¯ full pension contribution during their duration of employment.

Suggested Citation

  • HE Lixin, 2008. "The distributional effects of public pension reform in urban China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 3(2), pages 255-276, June.
    • Handle: RePEc:fec:journl:v:3:y:2008:i:2:p:255-276
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-008-0012-x
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    Cited by:

    1. Feng, Jin & He, Lixin & Sato, Hiroshi, 2011. "Public pension and household saving: Evidence from urban China," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 470-485.

    More about this item

    Keywords

    pension reform; income distribution; inter and intra-generational inequality;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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