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Comparison and Evaluation of China’s Urban Social Security Financing System Before and After the Reform

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  • Guan Huang

    (Xiamen University Tan Kah Kee College, Zhangzhou Campus of Xiamen University, Fujian, China.)

  • Jingmiao Wang

    (Xiamen University Tan Kah Kee College, Zhangzhou Campus of Xiamen University, Fujian, China. 26703316@qq.com)

Abstract

The sustainability of China’s urban social security financing system has recently been seriously questioned. This article divides the financing system’s development into two periods (before and after reform). It compares the capital collection and the distribution and circulation structures and reviews the financing system before and after reform. In this study, we also discuss and explain the ‘empty account’ phenomenon, which severely undermines the financing system’s sustainability. We allege that the money accumulation system adopted after reform, which correlates personal accounts with the social pool, is not running as designed but as a ‘pay-as-you-go’ system. After evaluating the efficiency and cost performance of both periods, testing the financing system’s sustainability and correlating the system during both time periods with economic and social development, we find that the financing systems’ operation after reform corresponds with theories proved by case studies in other advanced states.

Suggested Citation

  • Guan Huang & Jingmiao Wang, 2022. "Comparison and Evaluation of China’s Urban Social Security Financing System Before and After the Reform," China Report, , vol. 58(2), pages 152-170, May.
    • Handle: RePEc:sae:chnrpt:v:58:y:2022:i:2:p:152-170
    DOI: 10.1177/00094455211054366
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    References listed on IDEAS

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    1. Laurence J. Kotlikoff, 1996. "Privatization of Social Security: How It Works and Why It Matters," NBER Chapters, in: Tax Policy and the Economy, Volume 10, pages 1-32, National Bureau of Economic Research, Inc.
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