The Pension Scheme in Vietnam: Current Status and Challenges in an Aging Society
The publicly-managed Pay-As-You-Go (PAYG) defined-benefit pension scheme in Vietnam is described, with an analysis of its financial sustainability in the context of an aging society in a dynamically efficient economy. By using actuarial models developed by the International Labor Organization (ILO), the paper finds that the implicit pension debt (IPD) of the scheme is high in comparison with GDP of the year 2000, which is the base year for projections. Regarding the social aspect, a high IPD implies that the burden of maintaining this scheme is borne by the current and future participants. For this reason, the pension scheme in Vietnam will cause not only financial instability but also inter-generational inequity. In order to avoid this situation, the current scheme needs to be reformed. In particular, Vietnam should move to a partially-funded defined-contribution scheme with careful considerations of social and economic impacts so as to avoid both financial instability and inter-generational inequity.
|Date of creation:||Apr 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://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.:
- Robert P. Hagemann & Giuseppe Nicoletti, 1989. "Ageing Populations: Economic Effects and Implications for Public Finance," OECD Economics Department Working Papers 61, OECD Publishing.
- Laurence J. Kotlikoff & Willi Leibfritz & Willi Leibfritz, 1999.
"An International Comparison of Generational Accounts,"
in: Generational Accounting around the World, pages 73-102
National Bureau of Economic Research, Inc.
- Laurence J. Kotlikoff & Willi Leibfritz, 1998. "An International Comparison of Generational Accounts," NBER Working Papers 6447, National Bureau of Economic Research, Inc.
- Olivier Jean Blanchard & Philippe Weil, 1992.
"Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games Under Uncertainty,"
NBER Working Papers
3992, National Bureau of Economic Research, Inc.
- Blanchard Olivier & Weil Philippe, 2001. "Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-23, November.
- Olivier J. Blanchard & Philippe Weil, 2001. "Dynamic Efficiency, the Riskless Rate, and Debt Ponzi Games under Uncertainty," Sciences Po publications info:hdl:2441/8607, Sciences Po.
- Martin MÃ¼hleisen & Hamid Faruqee, 2001.
"Population Aging in Japan; Demographic Shock and Fiscal Sustainability,"
IMF Working Papers
01/40, International Monetary Fund.
- Faruqee, Hamid & Muhleisen, Martin, 2003. "Population aging in Japan: demographic shock and fiscal sustainability," Japan and the World Economy, Elsevier, vol. 15(2), pages 185-210, April.
- Oshio, Takashi, 2002. "Net Pension Liabilities, Intergenerational Equity, and Pension Reforms," Discussion Paper 131, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Alan J. Auerbach & Laurence J. Kotlikoff & Robert P. Hagemann & Giuseppe Nicoletti, 1989. "The Economic Dynamics of an Ageing Population: The Case of Four OECD Countries," OECD Economics Department Working Papers 62, OECD Publishing.
- Paul van den Noord & Richard Herd, 1993. "Pension Liabilities in the Seven Major Economies," OECD Economics Department Working Papers 142, OECD Publishing.
- Jagadeesh Gokhale, 1996. "Demographic change, generational accounts, and national saving in the United States," Working Paper 9603, Federal Reserve Bank of Cleveland.
- Martin Feldstein & Jeffrey B. Liebman, 2001.
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
- Friedman, Barry & James, Estelle & Kane, Cheikh & Queisser, Monika, 1996. "How can China provide income security for its rapidly aging population?," Policy Research Working Paper Series 1674, The World Bank.
- Holzmann, Robert & Palacios, Robert & Zviniene, Asta, 2004. "Implicit pension debt: issues, measurement and scope in international perspective," Social Protection Discussion Papers 30153, The World Bank.
- Noriyuki Takayama & Yukinobu Kitamura & Hiroshi Yoshida, 1999. "Generational Accounting in Japan," NBER Chapters, in: Generational Accounting around the World, pages 447-470 National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:969. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.