Dependent children and aged parents: funding education and social security in an aging economy

Pecchenino, Rowena A.; Pollard, Patricia S.

doi:10.1016/s0164-0704(02)00024-1

Cited by 43 publications

(25 citation statements)

References 26 publications

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“…The capital share of income, , is usually to be estimated as 0.3 in developed countries (e.g., Zhang et al, 2001;Pecchenino and Pollard, 2002;Barro and Sala-I-Martin, 2004). The labor in China is comparatively cheaper, thus the labor share of income is lower, while the capital share of income is higher than that in developed countries.…”

Section: Estimation Of Parameter Valuesmentioning

confidence: 99%

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Urban public pension, replacement rates and population growth rate in China

Yang

2009

Insurance: Mathematics and Economics

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This paper uses an overlapping generations model to investigate the urban public pension in China. It examines the effects of the replacement rates and population growth rate on the capital-labor ratio, pension benefits, consumption and utility, and finds the optimal replacement rate. It is shown that raising the individual account benefit replacement rate only increases the individual account benefits. Raising the social pool benefit replacement rate induces the increase in the social pool benefits and retirement-period consumption, while the decrease in the capital-labor ratio, individual account benefits, working-period consumption and utility. The fall in the population growth rate leads to the increase in the capital-labor ratio, social pool benefits, individual account benefits, working-period consumption and utility, while the decrease in the retirement-period consumption. The optimal social pool benefit replacement rate depends on the individual discount factor, social discount factor, capital share of income and population growth rate, and it decreases in the case of fallen population growth rate. It will do more good than harm to raise the individual account benefit replacement rate, reduce the social pool benefit replacement rate and strictly implement China's population policy.

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Section: Estimation Of Parameter Valuesmentioning

confidence: 99%

“…Some of the literature on public pension with overlapping generations (OLG) model study pay-as-you-go (PAYG) pension system (e.g., Pecchenino and Pollard, 2002;Groezen et al, 2003). Several studies analyze fully funded pension system (e.g., Abel, 1987).…”

Section: Introductionmentioning

confidence: 99%

Urban public pension, replacement rates and population growth rate in China

Yang

2009

Insurance: Mathematics and Economics

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“…The capital share of income, , is usually to be estimated as 0.3 in developed countries (e.g., Pecchenino and Pollard [3] and Zhang et al [4] ). The labor in China is comparatively cheaper, and thus the labor share of income is lower, while the capital share of income is higher than that in developed countries.…”

Section: Estimation Of Parameter Valuesmentioning

confidence: 99%

“…Pecchenino and Pollard [1] , Pecchenino and Utendorf [2] , Pecchenino and Pollard [3] , Zhang et al [4] , etc. have used overlapping generations (OLG) model with lifetime uncertainty to study pay-as-you-go or fully funded public pension systems.…”

Section: Introductionmentioning

confidence: 99%

Lifetime Uncertainty and the Optimal Replacement Rate of Urban Public Pension in China

Yang

2008

2008 International Workshop on Modelling, Simulation and Optimization

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“…Yaarri (1965) pioneers studies on consumer allocation over time concentrating on the lifetime uncertainty and ignoring the other uncertainties by a continuous time model. Some of the literature on public pension with lifetime uncertainty studies PAYG pension systems (e.g., Pecchenino and Utendorf, 1999;Fuster, 2000;and Pecchenino and Pollard, 2002). Several studies analyze fully funded pension (e.g., Abel, 1987;and Karni and Zilcha, 1989).…”

Section: Introductionmentioning

confidence: 99%

Population Growth Rate, Life Expectancy and Pension Program Improvement in China

Yang¹

2008

Asia-Pacific Journal of Risk and Insurance

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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.

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Dependent children and aged parents: funding education and social security in an aging economy

Cited by 43 publications

References 26 publications

Urban public pension, replacement rates and population growth rate in China

Urban public pension, replacement rates and population growth rate in China

Lifetime Uncertainty and the Optimal Replacement Rate of Urban Public Pension in China

Population Growth Rate, Life Expectancy and Pension Program Improvement in China

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