How can China provide income security for its rapidly aging population?

Barry Friedman, Estelle James, Cheikh Kane and Quei
Authors registered in the RePEc Author Service: Monika Queisser

No 1674, Policy Research Working Paper Series from The World Bank

Abstract: The authors discuss key choices policy makers face about China's pension system in the face of a rapidly aging population. They describe the problems the current pay-as-you-go system faces in the near and long term and simulate policy options for solving those problems. They find that simple design changes are necessary but not sufficient conditions for making the pension system sustainable. Partial funding is necessary to avoid large increases in future contribution rates. They investigate the impact of the old-age system and economic growth of a multipillar system that includes a modest mandatory tax-financed- basic benefit plus a mandatory fully-funded defined- contribution scheme. Implementation of a partially funded multipillar pensions system must go hand in hand with reform of the financial sector and restructured investment procedures that emphasize the "right" mix of competition, diversification, and regulation. Otherwise, China's pension reform will ultimately fail.

Keywords: Pensions & Retirement Systems; Labor Markets; Population & Development; International Trade and Trade Rules; Inflation; Rural Labor Markets (search for similar items in EconPapers)
Date: 1996-10-31
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Citations: View citations in EconPapers (5)

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