Sharing High Growth across Generations: Pensions and Demographic Transition in China
American Economic Journal: Macroeconomics
vol. 7,
no. 2, April 2015
(pp. 1-39)
Abstract
We analyze intergenerational redistribution in emerging economies with the aid of an overlapping generations model with endogenous labor supply. Growth is initially high but declines over time. A version of the model calibrated to China is used to analyze the welfare effects of alternative pension reforms. Although a reform of the current system is necessary to achieve financial sustainability, 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. (JEL E13, H55, J11, O11, O15, P24, P36)Citation
Song, Zheng, Kjetil Storesletten, Yikai Wang, and Fabrizio Zilibotti. 2015. "Sharing High Growth across Generations: Pensions and Demographic Transition in China." American Economic Journal: Macroeconomics, 7 (2): 1-39. DOI: 10.1257/mac.20130322Additional Materials
JEL Classification
- E13 General Aggregative Models: Neoclassical
- H55 Social Security and Public Pensions
- J11 Demographic Trends, Macroeconomic Effects, and Forecasts
- O11 Macroeconomic Analyses of Economic Development
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- P24 Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
- P36 Socialist Institutions and Their Transitions: Consumer Economics; Health; Education and Training: Welfare, Income, Wealth, and Poverty
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