Working Paper: NBER ID: w6794
Authors: Martin Feldstein
Abstract: China has legislated a mixed social security pension system with a defined benefit pay-as-you-go portion and an investment-based defined contribution portion. This paper analyses the economics of these two types of systems in the Chinese context and calculates the advantage to China of using an investment-based portion. Several options for reform of the recently legislated system are considered.
Keywords: social security; pension reform; China; pay-as-you-go; funded system
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| type of pension system (H55) | long-term cost of providing retirement benefits (J32) |
| transition from PAYGO to funded system (H55) | future taxes (H29) |
| funded system (I22) | required savings rate (D14) |
| transition to funded system (H55) | maximum additional cost for current employees (J39) |