Urban Public Pension, Replacement Rates and Population Growth Rate in China
AbstractThis paper uses an overlapping generations model to investigate the urban public pension in China. It examines the effects of the replacement rates and population growth rate on the capital-labor ratio, pension benefits, consumption and utility, and finds the optimal replacement rate. It is shown that raising the individual account benefit replacement rate only induces the increase in the individual account benefits. Raising the social pool benefit replacement rate induces the increase in the social pool benefits and retirement-period consumption, while the decrease in the capital-labor ratio, individual account benefits, working-period consumption and utility. The fall in the population growth rate leads to the increase in the capital-labor ratio, social pool benefits, individual account benefits, working-period consumption and utility, and leads to a decrease in the retirement-period consumption. The optimal social pool benefit replacement rate depends on the individual discount factor, social discount factor, capital share of income and population growth rate, and it decreases in the case of falling population growth rates. It will do more good than harm to raise the individual account benefit replacement rate, reduce the social pool benefit replacement rate and strictly implement China's population policy.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18846.
Date of creation: Oct 2009
Date of revision:
Publication status: Published in Insurance: Mathematics and Economics 2.45(2009): pp. 230-235
Urban public pension; Replacement rate; Population growth rate;
Other versions of this item:
- Yang, Zaigui, 2009. "Urban public pension, replacement rates and population growth rate in China," Insurance: Mathematics and Economics, Elsevier, vol. 45(2), pages 230-235, October.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2009-12-05 (Economics of Ageing)
- NEP-ALL-2009-12-05 (All new papers)
- NEP-DGE-2009-12-05 (Dynamic General Equilibrium)
- NEP-LAB-2009-12-05 (Labour Economics)
- NEP-TRA-2009-12-05 (Transition Economics)
- NEP-URE-2009-12-05 (Urban & Real Estate Economics)
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