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Pension Reform in China: The Need for a New Approach

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  • Mr. Steven V Dunaway
  • Mr. Vivek B. Arora

Abstract

The rapid aging of China's population over the next few decades makes it important for a new pension system with broad and adequate coverage to be put in place quickly. Pension reforms, first initiated in 1997, have become bogged down in difficulties over dealing with the "legacy costs" associated with the relatively more generous benefits provided under the old system. This paper argues that a way forward is to separate the legacy problem from the problem of setting up a new pension system, and it suggests concrete proposals for setting up such a new system which would cover both urban and rural workers.

Suggested Citation

  • Mr. Steven V Dunaway & Mr. Vivek B. Arora, 2007. "Pension Reform in China: The Need for a New Approach," IMF Working Papers 2007/109, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/109
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    References listed on IDEAS

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    1. repec:hal:spmain:info:hdl:2441/gaufue4me9tvqtg0t3u18e3la is not listed on IDEAS
    2. Zheng Song & Kjetil Storesletten & Yikai Wang & Fabrizio Zilibotti, 2015. "Sharing High Growth across Generations: Pensions and Demographic Transition in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 1-39, April.
    3. Yu-Wei Hu & Gregorio Impavido & Xiaohong Li, 2009. "Governance and Fund Management in the Chinese Pension System," IMF Working Papers 2009/246, International Monetary Fund.
    4. Chamon, Marcos & Liu, Kai & Prasad, Eswar, 2013. "Income uncertainty and household savings in China," Journal of Development Economics, Elsevier, vol. 105(C), pages 164-177.
    5. Nicolas Coeurdacier & Stéphane Guibaud & Keyu Jin, 2014. "Fertility Policies and Social Security Reforms in China," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(3), pages 371-408, August.
    6. Iris Claus & Les Oxley & Yong Cai & Yuan Cheng, 2014. "Pension Reform In China: Challenges And Opportunities," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 636-651, September.
    7. Nelson Mark & Steven Lugauer & Clayton Sadler, 2012. "The Role of Household Saving in the Economic Rise of China," Working Papers 004, University of Notre Dame, Department of Economics, revised Jun 2012.
    8. Nicolas Coeurdacier & Stéphane Guibaud & Keyu Jin, 2014. "Fertility Policies and Social Security Reforms in China," SciencePo Working papers hal-03393018, HAL.
    9. Serhan Cevik & Carolina Correa-Caro, 2020. "Growing (un)equal: fiscal policy and income inequality in China and BRIC+," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 25(4), pages 634-653, October.
    10. Heikki Oksanen, 2010. "The Chinese pension system - First results on assessing the reform options," European Economy - Economic Papers 2008 - 2015 412, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    11. Fabrizio Zilibotti, 2017. "Growing and Slowing Down Like China," Journal of the European Economic Association, European Economic Association, vol. 15(5), pages 943-988.
    12. Yue Guo & Lailei Lou & Tailai Guo & Zuwei Yu, 2017. "Valuing The Chinese Reimbursement System Of The Retirement Pension Insurance For Urban Employees," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 5(2), pages 34-52.
    13. Kai Guo & Mr. Papa M N'Diaye, 2010. "Determinants of China’s Private Consumption: An International Perspective," IMF Working Papers 2010/093, International Monetary Fund.
    14. Li Yang, 2021. "Towards equity and sustainability? China’s pension system reform moves center stage," World Inequality Lab Working Papers halshs-03215912, HAL.
    15. Nicolas Coeurdacier & Stéphane Guibaud & Keyu Jin, 2014. "Fertility Policies and Social Security Reforms in China," SciencePo Working papers Main hal-03393018, HAL.
    16. Li Yang, 2021. "Towards equity and sustainability? China’s pension system reform moves center stage," Working Papers halshs-03215912, HAL.
    17. Ramon Moreno & Marjorie Santos, 2008. "Pension systems in EMEs: implications for capital flows and financial markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial globalisation and emerging market capital flows, volume 44, pages 45-69, Bank for International Settlements.

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