Yang, Zaigui (2009): Altruism, Lifetime Uncertainty and Optimal Public Pension Contribution Rate. Published in: Information and Computing Science, 2009. ICIC '09. Second International Conference on (May 2009): pp. 185-188.
Download (237kB) | Preview
Assuming that individuals are altruistic, this paper employs an overlapping generations model with lifetime uncertainty to study the partially funded public pension in China. By comparing the market economy equilibrium with the social optimum allocation, we find the optimal firm contribution rate. Our simulation results show that this rate increases when the life expectancy rises, while decreases when the population growth rate falls. It decreases in the joint case of risen life expectancy and fallen population growth rate because it is much more sensitive to the latter than to the former. The result has some policy implications.
|Item Type:||MPRA Paper|
|Original Title:||Altruism, Lifetime Uncertainty and Optimal Public Pension Contribution Rate|
|Keywords:||altruism; lifetime uncertainty; pension contribution rat|
|Subjects:||H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions|
|Depositing User:||Zaigui Yang|
|Date Deposited:||26. Nov 2009 01:55|
|Last Modified:||19. Feb 2013 01:27|
E. Sheshinski and Y. Weiss, “Uncertainty and optimal social security systems”, Quarterly Journal of Economics, vol. 96, 1981, pp. 189–206.
A.B. Abel, “Aggregate savings in the presence of private and social insurance”, In R. Dornbusch et. al. (eds.), Macroeconomics and Finance: Essays in Honor of Franco Modigliani, MIT Press, Cambridge, 1987.
A.B. Abel, “Birth, death and taxes”, Journal of Public Economics, vol. 39, 1989, pp. 1–15.
L. Fuster, “Capital accumulation in an economy with dynasties and lifetime uncertaintys”, Review of Economic Dynamics, vol. 3, 2000, pp. 650–674.
J. Zhang, J. Zhang and R. Lee, “Mortality decline and long-run economic growth”, Journal of Political Economy, vol. 80, 2001, pp. 485–507.
P.A. Samuelson, “Optimum social security in a life-cycle growth model”, International Economic Review, vol. 16, 1975, pp. 539–544.
O.J. Blanchard and S. Fischer, Lectures on Macroeconomics, MIT Press, London, 1989.
R.J. Barro and X. Sala-i-Martin, Economic Growth, 2nd ed, MIT Press, Cambridge, 2004.
B. Groezen, T. Leers and L. Meijdam, “Social security and endogenous fertility: pensions and child allowances as siamese twins”, Journal of Public Economics, vol. 87, 2003, pp. 233–251.
R. Pecchenino and P. Pollard, “Dependent children and aged parents: funding education and social security in an aging economy”, Journal of Macroeconomics, vol. 24, 2002, pp. 145–169.
UN Secretariat, “World Population Prospects: the 2006 Revision”, PLACE: the Population Division of the Department of Economic and Social Affairs of the UN Secretariat [http://earthtrends.wri.org/text/population-health/variable-379.html], 2007, (accessed on Sept. 16, 2008).