IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0331739.html
   My bibliography  Save this article

Change in population structure, policy adjustment, and China’s public pension sustainability

Author

Listed:
  • Weiqiang Fan
  • Jia Meng
  • Hualei Yang

Abstract

This study assesses the impact of population structure changes and policy adjustment on public pension sustainability. The analysis is based on actuarial models for pension income, expenditure, and accumulated balance, assessed under varying scenarios. Based on the results, China’s pension financial situation will be in deficit by around 2028, with accumulated deficit potentially as high as RMB 147,411.037 billion in 2050 without population policy adjustment. Second, matching the fertility level with replacement level will only slightly ease the pension financial situation after 2041 and cannot change the deficit trend or the time of first appearance of deficit. The short-term situation may worsen slightly. Third, delaying the legal retirement age to 65 years significantly improves the pension financial situation and ensures no accumulated pension deficit before 2050. Lastly, although increasing economic growth and reducing pension growth can significantly improve the pension financial situation, if the accumulated pension deficit does not appear before 2050, the pension growth rate should be controlled below 0 and economic growth must double in future. In conclusion, to improve the financial status of pensions and ensure elderly welfare, we should focus on reducing pension growth, increasing economic growth, and postponing the statutory retirement age.

Suggested Citation

  • Weiqiang Fan & Jia Meng & Hualei Yang, 2025. "Change in population structure, policy adjustment, and China’s public pension sustainability," PLOS ONE, Public Library of Science, vol. 20(9), pages 1-14, September.
    • Handle: RePEc:plo:pone00:0331739
    DOI: 10.1371/journal.pone.0331739
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0331739
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0331739&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0331739?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
    ---><---

    References listed on IDEAS

    as
    1. Miroslav VerbiÄ & Boris Majcen & Renger Van Nieuwkoop, 2006. "Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model," Eastern European Economics, Taylor & Francis Journals, vol. 44(4), pages 60-81, August.
    2. John Bongaarts, 2004. "Population Aging and the Rising Cost of Public Pensions," Population and Development Review, The Population Council, Inc., vol. 30(1), pages 1-23, March.
    3. David Blake & Les Mayhew, 2006. "On The Sustainability of the UK State Pension System in the Light of Population Ageing and Declining Fertility," Economic Journal, Royal Economic Society, vol. 116(512), pages 286-305, June.
    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. Said Outlioua & Abdesselam Fazouane, 2023. "Which factors affect the sustainability of pension schemes?," Economic Affairs, Wiley Blackwell, vol. 43(1), pages 89-108, February.
    2. Jin Hu & Peter Josef Stauvermann & Juncheng Sun, 2022. "The Impact of the Two-Child Policy on the Pension Shortfall in China: A Case Study of Anhui Province," Sustainability, MDPI, vol. 14(13), pages 1-21, July.
    3. Zhen Hu & James Yang, 2021. "Does Delayed Retirement Crowd Out Workforce Welfare? Evidence in China," SAGE Open, , vol. 11(4), pages 21582440211, November.
    4. Lanza Queiroz, Bernardo & Lobo Alves Ferreira, Matheus, 2021. "The evolution of labor force participation and the expected length of retirement in Brazil," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    5. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2023. "Fertility and climate change," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 208-252, January.
    6. David Backus & Thomas Cooley & Espen Henriksen, 2013. "Demography and Low-Frequency Capital Flows," NBER Chapters, in: NBER International Seminar on Macroeconomics 2013, pages 94-102, National Bureau of Economic Research, Inc.
    7. Gurgen Aslanyan, 2014. "The migration challenge for PAYG," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 1023-1038, October.
    8. Jack DeWaard & Keuntae Kim & James Raymer, 2012. "Migration Systems in Europe: Evidence From Harmonized Flow Data," Demography, Springer;Population Association of America (PAA), vol. 49(4), pages 1307-1333, November.
    9. Huan Wang & Jianyuan Huang & Shuangyue Sun, 2019. "Assessment of the Financial Sustainability of China’s New Rural Pension Plan: Does the Demographic Policy Reform Matter?," Sustainability, MDPI, vol. 11(18), pages 1-22, September.
    10. Jack DeWaard & James Raymer, 2012. "The temporal dynamics of international migration in Europe: Recent trends," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 26(21), pages 543-592.
    11. Koissi, Marie-Claire & Shapiro, Arnold F. & Hognas, Goran, 2006. "Evaluating and extending the Lee-Carter model for mortality forecasting: Bootstrap confidence interval," Insurance: Mathematics and Economics, Elsevier, vol. 38(1), pages 1-20, February.
    12. Vogt, Tobias C. & Kluge, Fanny A., 2015. "Can public spending reduce mortality disparities? Findings from East Germany after reunification," The Journal of the Economics of Ageing, Elsevier, vol. 5(C), pages 7-13.
    13. Mehmet F. Aysan & Roderic Beaujot, 2009. "Welfare Regimes for Aging Populations: No Single Path for Reform," Population and Development Review, The Population Council, Inc., vol. 35(4), pages 701-720, December.
    14. McIntyre, Lynn & Patterson, Patrick B. & Mah, Catherine L., 2019. "The application of ‘valence’ to the idea of household food insecurity in Canada," Social Science & Medicine, Elsevier, vol. 220(C), pages 176-183.
    15. Federico Ciliberto & Amalia R. Miller & Helena Skyt Nielsen & Marianne Simonsen, 2016. "Playing The Fertility Game At Work: An Equilibrium Model Of Peer Effects," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 827-856, August.
    16. Lijian Wang & Daniel Béland, 2014. "Assessing the Financial Sustainability of China’s Rural Pension System," Sustainability, MDPI, vol. 6(6), pages 1-20, May.
    17. Mauricio Arias & Juan Carlos Mendoza, 2009. "Un modelo de simulación del Régimen Pensional de Ahorro Individual con Solidaridad en Colombia," Temas de Estabilidad Financiera 044, Banco de la Republica de Colombia.
    18. Fanny A. Kluge & Emilio Zagheni & Elke Loichinger & Tobias C. Vogt, 2014. "The advantages of demographic change after the wave: fewer and older, but healthier, greener, and more productive?," MPIDR Working Papers WP-2014-003, Max Planck Institute for Demographic Research, Rostock, Germany.
    19. Landis MacKellar & Robert Holzmann & Jana Repansek, 2009. "Pension Reform in Southeastern Europe : Linking to Labor and Financial Market Reforms," World Bank Publications - Books, The World Bank Group, number 2587, April.
    20. De-Lei Sheng & Linfeng Shi & Danping Li & Yanping Zhao, 2022. "Manage Pension Deficit with Heterogeneous Insurance," Methodology and Computing in Applied Probability, Springer, vol. 24(2), pages 1119-1141, June.

    More about this item

    Statistics

    Access and download statistics

    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:plo:pone00:0331739. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.