Sharing high growth across generations:pensions and demographic transition in China

Zheng Song, Kjetil Storesletten, Yikai Wang and Fabrizio Zilibotti
Additional contact information
Zheng Song: Department of Economics, University of Chicago Booth, Chicago, Illinois, United States
Kjetil Storesletten: Federal Reserve Bank of Minneapolis, Minnesota, United States
Yikai Wang: Department of Economics, University of Zurich, Switzerland

CEPRA working paper from USI Università della Svizzera italiana

Abstract: Intergenerational inequality and old-age poverty are salient isuues in contemporary China. China's aging population threatens the fiscal sustainability of its pension system, a key vehicle for intergenerational redistribution. We analyze the positive and normative effects of alternative pension reforms, using a dynamic general equilibrium model that incorporates population dynamics and productivity growth. Although a reform is necessary, delaying its implementation implies large welfare gains for the (poorer) current generations, imposing only small costs on (richer) future generations. In contrast, a fully funded reform harms current generations, with small gains to future generations. High wage growth is key for these results.

Keywords: China; credit market imperfections; demographic transition; economic growth; fully funded system; inequality; intergenerational redistribution; labor supply; migration; pensions; poverty; rural-urban reallocation; total fertility rate; wage growth (search for similar items in EconPapers)
JEL-codes: E21 E24 G23 H55 J11 J13 O43 R23 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2012-07
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-fdg, nep-mac and nep-tra
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Sharing High Growth across Generations: Pensions and Demographic Transition in China (2015)
Working Paper: Sharing High Growth Across Generations: Pensions and Demographic Transition in China (2012)
Working Paper: Sharing High Growth Across Generations: Pensions and Demographic Transition in China (2012)
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