IDEAS home Printed from https://ideas.repec.org/a/eee/socmed/v338y2023ics0277953623007116.html
   My bibliography  Save this article

Who benefits from the basic old-age insurance contribution subsidy policy for the disabled?

Author

Listed:
  • Zhang, Xiang
  • Li, Dongwen
  • Zhan, Peng
  • Bai, Xianchun

Abstract

The aim of this paper is to track the whereabouts of basic old-age insurance (BOI) contribution subsidies. Little research has paid attention to the misalignment between the implementation objects of subsidy policies and the actual beneficiaries. In recent years, local governments in China have followed a contribution subsidy policy to help persons with disabilities (PWDs) with lower life expectancies. This study applied an actuarial model to calculate the leakage rate of the BOI contribution subsidy. The primary data are from the life tables of the entire population and PWDs in K province in China in 2015. It was found that, under different booking interest rates, 35.27%–61.26% of the contribution subsidy for PWDs in the individual account will be inherited by their heirs, and under different discount rates, 18.21%–68.74% in the pooling account will be enjoyed by non-disabled participants. The policy of BOI contribution subsidy for PWDs failed to account for the shorter average life expectancy and the lower average income of PWDs and would result in a welfare loss for PWDs. Therefore, it was suggested that it should be replaced by a non-contributory pension policy for PWDs.

Suggested Citation

  • Zhang, Xiang & Li, Dongwen & Zhan, Peng & Bai, Xianchun, 2023. "Who benefits from the basic old-age insurance contribution subsidy policy for the disabled?," Social Science & Medicine, Elsevier, vol. 338(C).
    • Handle: RePEc:eee:socmed:v:338:y:2023:i:c:s0277953623007116
    DOI: 10.1016/j.socscimed.2023.116354
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0277953623007116
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.socscimed.2023.116354?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Barra Roantree & Jonathan Shaw, 2018. "What a difference a day makes: inequality and the tax and benefit system from a long-run perspective," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(1), pages 23-40, March.
    2. Natalie Simeu & Sophie Mitra, 2019. "Disability and household economic wellbeing: evidence from Indonesian longitudinal data," Oxford Development Studies, Taylor & Francis Journals, vol. 47(3), pages 275-288, July.
    3. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1995. "Precautionary Saving and Social Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 360-399, April.
    4. Acemoglu, Daron, 2005. "Politics and economics in weak and strong states," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1199-1226, October.
    5. Jinwook Bahk & Hee-Yeon Kang & Young-Ho Khang, 2019. "The Life Expectancy Gap between Registered Disabled and Non-Disabled People in Korea from 2004 to 2017," IJERPH, MDPI, vol. 16(14), pages 1-9, July.
    6. Abhijit Banerjee & Esther Duflo & Clément Imbert & Santhosh Mathew & Rohini Pande, 2020. "E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India," American Economic Journal: Applied Economics, American Economic Association, vol. 12(4), pages 39-72, October.
    7. Beetsma, Roel M.W.J. & Romp, Ward E. & Vos, Siert J., 2012. "Voluntary participation and intergenerational risk sharing in a funded pension system," European Economic Review, Elsevier, vol. 56(6), pages 1310-1324.
    8. Hsin-Pei Hsueh & Chien-Ming Wang & Cheng-Feng Wu & Fangjhy Li, 2019. "Investigation of the Co-Movement Relationship between Medical Expenditure and GDP in Taiwan-Based on Wavelet Analysis," IJERPH, MDPI, vol. 16(24), pages 1-9, December.
    9. Micheál L. Collins & Gerard Hughes, 2017. "Supporting Pension Contributions Through the Tax System: Outcomes, Costs and Examining Reform," The Economic and Social Review, Economic and Social Studies, vol. 48(4), pages 489-514.
    10. Pieter Vanhuysse & Marton Medgyesi & Robert I Gal, 2021. "Welfare states as lifecycle redistribution machines: Decomposing the roles of age and socio-economic status shows that European tax-and-benefit systems primarily redistribute across age groups," PLOS ONE, Public Library of Science, vol. 16(8), pages 1-18, August.
    11. Armando Barrientos, 2015. "Is There a Role for Social Pensions in Asia?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(1), pages 8-20, January.
    12. Lena Morgon Banks & Hannah Kuper & Sarah Polack, 2017. "Poverty and disability in low- and middle-income countries: A systematic review," PLOS ONE, Public Library of Science, vol. 12(12), pages 1-19, December.
    13. Antón, José-Ignacio & De Bustillo, Rafael Muñoz & Fernández-Macías, Enrique, 2014. "Supplementary private pensions and saving: evidence from Spain," Journal of Pension Economics and Finance, Cambridge University Press, vol. 13(4), pages 367-388, October.
    14. Timothy Besley & Ethan Ilzetzki & Torsten Persson, 2013. "Weak States and Steady States: The Dynamics of Fiscal Capacity," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(4), pages 205-235, October.
    15. Robert Holzmann & Richard Hinz, 2005. "Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform," World Bank Publications - Books, The World Bank Group, number 7336, December.
    16. Peter Lloyd-Sherlock & Sutapa Agrawal, 2014. "Pensions and the Health of Older People in South Africa: Is there an Effect?," Journal of Development Studies, Taylor & Francis Journals, vol. 50(11), pages 1570-1586, November.
    17. Palacios, Robert & Sluchynsky, Oleksiy, 2006. "Social pensions Part I : their role in the overall pension system," Social Protection Discussion Papers and Notes 36237, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haiyan Jia & Xiaoyu Sai & Yangyue Su & Ying Huang, 2022. "Measurement and Decomposition of the Health Poverty of Rural Residents in China," IJERPH, MDPI, vol. 19(19), pages 1-20, October.
    2. Aaron George, Grech, 2014. "Pension policy design: The core issues," MPRA Paper 53662, University Library of Munich, Germany.
    3. Timothy Besley, 2020. "State Capacity, Reciprocity, and the Social Contract," Econometrica, Econometric Society, vol. 88(4), pages 1307-1335, July.
    4. Pak, Tae-Young, 2021. "What are the effects of expanding social pension on health? Evidence from the Basic Pension in South Korea," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    5. Esslinger, Christoph & Mueller, Cornelius, 2014. "State Capacity and Public Debt: A political economy analysis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100311, Verein für Socialpolitik / German Economic Association.
    6. Marcinkiewicz Edyta, 2017. "Factors Affecting the Development of Voluntary Pension Schemes in CEE Countries: A Panel Data Analysis," Central European Economic Journal, Sciendo, vol. 3(50), pages 26-40, December.
    7. Rudolph, Alexandra & Priebe, Jan, 2015. "Pension programs around the world: determinants of social pension," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112986, Verein für Socialpolitik / German Economic Association.
    8. repec:cep:sticas:/172 is not listed on IDEAS
    9. Hwang, Inuk & Lee, Tae-Jin, 2022. "Health improvements of older adults based on benefit duration: Lessons from Korean social pension policies," Social Science & Medicine, Elsevier, vol. 315(C).
    10. Jimenez-Ayora, Pablo & Ulubaşoğlu, Mehmet Ali, 2015. "What underlies weak states? The role of terrain ruggedness," European Journal of Political Economy, Elsevier, vol. 39(C), pages 167-183.
    11. Ivan Byaruhanga & Jonas Debesay, 2021. "The Impact of a Social Assistance Program on the Quality of Life of Older People in Uganda," SAGE Open, , vol. 11(1), pages 21582440219, January.
    12. Grech, Aaron George, 2013. "How best to measure pension adequacy," MPRA Paper 46126, University Library of Munich, Germany.
    13. Boonen, Tim J. & De Waegenaere, Anja, 2017. "Intergenerational risk sharing in closing pension funds," Insurance: Mathematics and Economics, Elsevier, vol. 74(C), pages 20-30.
    14. Andrea Papadia, 2024. "Fiscal policy under constraints: Fiscal capacity and austerity during the Great Depression," Economic History Review, Economic History Society, vol. 77(1), pages 90-118, February.
    15. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    16. Cristóbal Huneeus & Andrea Repetto, 2005. "The Dynamics of Earnings in Chile," Central Banking, Analysis, and Economic Policies Book Series, in: Jorge Restrepo & Andrea Tokman R. & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edi (ed.),Labor Markets and Institutions, edition 1, volume 8, chapter 12, pages 383-410, Central Bank of Chile.
    17. Maria Casanova-Rivas, 2008. "Dynamic Complementarities: A Computational and Empirical Analysis of Couples' Retirement Decisions," 2008 Meeting Papers 1073, Society for Economic Dynamics.
    18. Charles Grant & Christos Koulovatianos & Alexander Michaelides & Mario Padula, 2010. "Evidence on the Insurance Effect of Redistributive Taxation," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 965-973, November.
    19. Trang Nguyen & Sara Holton & Thach Tran & Jane Fisher, 2019. "Informal mental health interventions for people with severe mental illness in low and lower middle-income countries: A systematic review of effectiveness," International Journal of Social Psychiatry, , vol. 65(3), pages 194-206, May.
    20. Kang, Ji Young & Park, Sojung & Ahn, Seoyeon, 2022. "The effect of social pension on consumption among older adults in Korea," The Journal of the Economics of Ageing, Elsevier, vol. 22(C).
    21. Andreas Fagereng & Luigi Guiso & Davide Malacrino & Luigi Pistaferri, 2020. "Heterogeneity and Persistence in Returns to Wealth," Econometrica, Econometric Society, vol. 88(1), pages 115-170, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:socmed:v:338:y:2023:i:c:s0277953623007116. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/315/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.