Research On Social Security & Gap Between The Rich And The Poor

Besides China, the dissertation presents theory analysis and positive study Social Security System of six typical states and system's impact on gap between the poor and the rich. Drawing lessons from international experience and considering the situation of our country, measures are advanced to perfect China's Social Security System. The article is composed of the preface and six chapters.The preface summarizes the significance of this subject, the domestic and international research status, the study aim, research methods and the contributions this thesis strives to make.Chapter One: Economic analysis of redistribution of Social Security System. The altitude of West economists to the role of redistribution of Social Security System underwent a process of full negation - full affirmation - partial affirmation– re-negation.Classic economists of 18th century absolutely opposed to redistribution of Social Security System. Adam Smith held that old English Poor Laws badly hamper mobility of labor. David Richard considered that the law does the rich harm while the poor not benefit from it. Thus total social welfare declined. These discussions retarded establishment of Social Security System in England.In 19 century, economists absolutely agreed to redistribution of Social Security System. Historical school suggested that state should provide social insurance to resolve the problem caused by maldistribution. This proposal had been adopted by Bismarck government and the first Social Security System came into being in Germany. Old welfare economists in twenties of 20th advanced that state interfere economic completely. Pigou thought that redistribution for equal division may optimize total social welfare. This idea of equal division at length set up theoretical foundation for England Social Security System. Swedish school advocated nationalization of income and consumption. They thought that income could be equalized by transferring payment and collecting progressive tax. Directed by these ideas, Sweden built up a"from cradle to bomb"Social Security System and became an exemplar of welfare state.After thirties of 20th, new economic schools sprouted out. They partially agreed to redistribution of Social Security System. New welfare economic school disagreed with government thorough control of distribution and production. They favored rational distribution instead of equal division. They insisted government responsibility to make up for the poor caused by social changing. Keynes thought that maldistribution account for lowering consume propensity. And as a measure of transferring, Social Security System can enhance the consume propensity. New classical-synthesis school regarded that economic growth is the best way to improve the condition of the poor and the misfortune. New-Cambridge school discussed that maldistribution come from unreasonable resource allocation. Keynesianism believed that Social Security System only provided limited insurance for people and its redistribution effect is limited. These ideas have been well embodied in American Social Security System. Freiburg school's social market economy argued that social fair and social safety are essential principals for Social Security System. They insisted on government interference in maldistribution and labor market. The idea has been full embodied in Germany Social Security System.Neo–liberalism prevailed after stagnant dilation in seventies of 20th. They re-opposed to redistribution of Social Security System. Thinking that Social Security System critically distorts the market order of free competition, they depreciated inference and insisted that Social Security System privatization. Friedman advanced that negative income tax substitute poverty program as well as government guarantee minimum income and encourage self-help. Supply-side school considered that Social Security System foster laziness, strike at motivation of labor, and aggravate poverty.Hayek thought that un-redistribution, un-government, and un-mandatory are radical characteristic of Social Security System. Under this circumstance, Chile and some other Latin America countries privatized Social Security System successively; U.K. and some other countries come to cut welfare expenditure.Chapter Two: Positive study of"insurance"Social Security System and gap between the poor and the rich.As a consequence of awful redistribution measures and poorly first distribution, there exists a big gap between the poor and the rich in American. Redistribution of tax is stronger than transfer payment. Besides these, redistribution function of tax and transfer payment weakened, especially for the latter. American Social Security System emphasizes self-insurance. Social security tax makes up of one half of system income and rest are raised by general tax. System receipt and expenditure runs in low level. Federal receipt and expenditure of system amounts are to 6.5% of GDP and 5% of GDP respectively. Since receipt is greater than expenditure, the system has a highly accumulation propensity. Cash benefits decreased gradually. It occupies 55% of overall benefits.Compared to other countries, the gap between the poor and the rich is limited in Germany. Explain is that first distribution ratio are high and redistribution measures function well. Redistribution of tax is stronger than transfer payment. However, redistribution function of tax and transfer payment weakened, especially for the latter. System makes much of self-insurance. Social security tax made up of 70% of system income. General tax contributes other 30%. The receipt and expend of system are about to 30% of GDP, which is greater than that of England. System runs steadily and receipt and expenditure are well balanced. Cash benefits amounts to 68% of overall benefits and increases gradually.Chapter Three: Positive study of"welfare"Social Security System and gap between on the poor and the rich.The gap between the poor and the rich is moderate in England. It comes from terrible first distribution and extremely functioned redistribution measures. Redistribution of tax is stronger than transfer payment. But redistribution function of tax and transfer payment strengthened recently, especially for the tax system. Government duties are emphasized. 40% of system receipts derive from social security tax and more than 60% flows from general tax. The system receipt and expenditure in England is moderate compared to those of American and Germany. System receipt of central government amounts to 6% of GDP and expenditure 13% of GDP. System receipt of total governments is about of 22% of GDP and expenditure 25% of GDP. System balanced badly. System receipt of central government less than half of expenditure suggested that central government is in a big hole. Cash benefits amounts to 66% of overall benefits and declined stepwise.The gap between the poor and the rich is small in Sweden. Sweden has better first distribution and forcefully functioned redistribution measures. Redistribution of tax is stronger than transfer payment. Redistribution function of transfer payment and tax is fortified increasingly, especially for the latter. Government liability is emphasized. Less than 45% system income collects from social security tax and about 55% income flows from general tax. System receipt and expenditure in Sweden is high compared to other countries. Social security tax about to 14% of GDP takes the first place in national revenue. System receipt amounts to 40% of GDP and expenditure 30% of GDP. System balances badly. Central government bears much more than total governments. Cash benefits occupy 61% of overall benefits and a little decreased.Chapter four: Positive study of forced"saving"Social Security System and gap between the poor and the rich.There is a big gap between the poor and the rich in Singapore. Central Provident Fund is a fully funded system administrated by the government. It is a mandatory saving program, urging people prepared for their future. The Fund contributed by employer and employee together. Fund payment is low compared to other countries. Fund receipt is about 13% of GDP while expenditure 2% of GDP. Since Singapore's assistance program based on contribution, the poor get little help from the system. There is also a big gap between the poor and the rich in Chile. Chile emphasized on individual's contribution. The system is a fully saving program and is operated decentralized. System receipt and expenditure vary greatly every year and accumulate large fund. System has little function of redistribution.Chapter Five: Conclusion of the research on Social Security System of various nations.Theoretical analysis and positive study show that Social Security System seizes a more importance place on public expenditure. Public finance builds up economic foundation for Social Security System. Operating smoothly contributes to mitigate government financial burden. Federal nations and monopoly countries distribute and manage social security resource fairly by social security budget. American and Germany employ fund budget. England takes on public budget. Sweden resorts to package budget. Most of social security fund are collected by social security tax. Tax system of Social Security System has the nature of regression, which discounts effect of redistribution. Raising the supreme quota may lower effect of this regressive tax and enhance the effect of redistribution. Although contribution rate are different between employer and employee in many countries, tax burden is determined by the structure of labor market since cutting social security tax is not always equal to alleviate burden of firms. Regulating system receipt and expend is helpful to adjust efficient demanding and soothe economic cycles. Social security program can alleviate poverty by Intergeneration, intrageneration, and individual longitudinal redistribution. It also exerts substitute effect and proceeds effect on labor supply and has wealth substitution effect, retirement effect and bequest effect on savings. Chapter Six: Positive study of Social Security System and gap between thepoor and the rich in China and policy suggestion for it. Enlarging the gap between the poor and the rich is obvious in China. Gap between the urban and the rural especially catches people's eye. So do different regions. All of these come up to inequality of individual income. In individual income, wage provided little difference while property earnings caused much more diversity and transfer payment in between. Although gap between the poor and the rich enlarged in China, it is still in the safe scope. China's situation of income distribution can be analogous to that of Germany. Social Security System amplified gap between the urban and the rural because duality Social Security System is out of tune with ternary population structure. Further study shows that Social Security System of China diminished gap in urban area but has no effect on rural.Management of social security fund is in disorder in our country. Transfer payment is extremely low and lagged far behind economic growth. Gap between demand and supply of transfer payment are enlarged. It is necessary to perfect Social Security System by setting up social security budget and levying social security tax. Construct Social Security System in rural area will reduce gap between the rural and the urban. Setting up transfer payment system will diminish gap between the poor and the rich by transfer payment from governments to individuals and from individual to individual, and may smaller gap among regions by transfer payment from up-government to down-government and from one government to other government.