Citation
Song, Zheng Michael; Storesletten, Kjetil; Wang, Yikai; & Zilibotti, Fabrizio (2012). Sharing High Growth across Generations: Pensions and Demographic Transition in China.Abstract
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.
URL
http://dx.doi.org/10.2139/ssrn.2262375Reference Type
ReportYear Published
2012Author(s)
Song, Zheng MichaelStoresletten, Kjetil
Wang, Yikai
Zilibotti, Fabrizio