Population Growth Rate, Life Expectancy and Pension Program Improvement in China
Applying an overlapping-generations model with lifetime uncertainty, we examine in this paper China’s partially funded public pension system. The findings show that the individual contribution rate does not affect the capital-labor ratio but the firm contribution rate does. The optimal firm contribution rate depends on the capital share of income, social discount factor, survival probability, and population growth rate. The simulation results indicate that the optimal firm contribution rate rises with China’s life expectancy but, surprisingly, falls with the population growth rate. We demonstrate that the optimal firm contribution rate should be cut when the effect of falling population growth rate is greater than that of rising life expectancy and that the rate is much more sensitive to the population growth rate than to life expectancy. This paper also solves the optimal interval to cope with China’s population aging peak in the 2030s.
|Date of creation:||Mar 2008|
|Publication status:||Published in Asia-Pacific Journal of Risk and Insurance 2.2(2008): pp. 19-30|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luisa Fuster, 2000. "Capital Accumulation in an Economy with Dynasties and Uncertain Lifetimes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 650-674, October.
- Pecchenino, Rowena A. & Pollard, Patricia S., 2002.
"Dependent children and aged parents: funding education and social security in an aging economy,"
Journal of Macroeconomics,
Elsevier, vol. 24(2), pages 145-169, June.
- Rowena A. Pecchenino & Patricia S. Pollard, 2000. "Dependent children and aged parents: funding education and social security in an aging economy," Working Papers 1995-001, Federal Reserve Bank of St. Louis.
- Kelvin R. Utendorf & Rowena A. Pecchenino, 1999. "Social security, social welfare and the aging population," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 607-623.
- Pecchenino, R.A., 1994. "Social Security, Social Welfare and the Aging Population," Papers 9403, Michigan State - Econometrics and Economic Theory.
- Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, vol. 80(3), pages 485-507, June.
- Karni, Edi & Zilcha, Itzhak, 1989. "Aggregate and distributional effects of fair social security," Journal of Public Economics, Elsevier, vol. 40(1), pages 37-56, October.
- Eytan Sheshinski & Yoram Weiss, 1981. "Uncertainty and Optimal Social Security Systems," The Quarterly Journal of Economics, Oxford University Press, vol. 96(2), pages 189-206.
- E. Sheshinski & Y. Wiess, 1978. "Uncertainty and Optimal Social Security Systems," Working papers 225, Massachusetts Institute of Technology (MIT), Department of Economics.
- Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:18789. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.