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Assessing the Financial Sustainability of China’s Rural Pension System

  • Lijian Wang

    ()

    (Department of Social Security, School of Public Policy and Administration, Xi'an Jiaotong University, Xi'an 710049, China)

  • Daniel Béland

    ()

    (Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan, Saskatoon, SK S7N 5B8, Canada)

Registered author(s):

    Considering the rapid growth of China’s elderly rural population, establishing both an adequate and a financially sustainable rural pension system is a major challenge. Focusing on financial sustainability, this article defines this concept of financial sustainability before constructing sound actuarial models for China’s rural pension system. Based on these models and statistical data, the analysis finds that the rural pension funding gap should rise from 97.80 billion Yuan in 2014 to 3062.31 billion Yuan in 2049, which represents an annual growth rate of 10.34%. This implies that, as it stands, the rural pension system in China is not financially sustainable. Finally, the article explains how this problem could be fixed through policy recommendations based on recent international experiences.

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    Article provided by MDPI, Open Access Journal in its journal Sustainability.

    Volume (Year): 6 (2014)
    Issue (Month): 6 (May)
    Pages: 3271-3290

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    Handle: RePEc:gam:jsusta:v:6:y:2014:i:6:p:3271-3290:d:36507
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