Sharing High Growth across Generations: Pensions and Demographic Transition in China
Song, Zheng Michael; Storesletten, Kjetil; Wang, Yikai; & Zilibotti, Fabrizio. (2012). Sharing High Growth across Generations: Pensions and Demographic Transition in China. UBS Center Working Paper Series, Working Paper No. 1.
Song, Zheng Michael; Storesletten, Kjetil; Wang, Yikai; & Zilibotti, Fabrizio. (2012). Sharing High Growth across Generations: Pensions and Demographic Transition in China. UBS Center Working Paper Series, Working Paper No. 1.
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Intergenerational inequality and old-age poverty are salient issues 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.
RPRT
UBS Center Working Paper Series, Working Paper No. 1
Song, Zheng Michael
Storesletten, Kjetil
Wang, Yikai
Zilibotti, Fabrizio
2012
10.2139/ssrn.2262375
1671