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

  • Song, Zheng University of Chicago Booth, Chicago, Illinois, United States
  • Storesletten, Kjetil Federal Reserve Bank of Minneapolis, Minnesota, United States
  • Wang, Yikai Department of Economics, University of Zurich, Switzerland
  • Zilibotti, Fabrizio Center for Economic and Political Research on Aging (CEPRA), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera
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40 p.

English 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.
  • English
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  • RERO DOC 30339
  • ARK ark:/12658/srd1318466
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