Aging Problem, Economy Development And Pension Balance In China

The Aging problem is the social problem all the countries are facing sooner or later in the21st Century. Later in last century, western countries went to Aging society firstly; since then, the economy development and social security problem have been focused; academically, the relationship between economy development and population can be traced back to Malthus’s population theory; after that, Harrod, Domar and Solow combine the growth theory model with demographic factors; Still recently, the academic group do the further research on age structure and economy development. The pension system was born during the development from self-sufficient stage to social labor division, which was proved to improve the consumption trend and achieve the macro-economy balance. The pension system as an important part of social security, play a significant role in the Aging population social system.For China, the population group from Baby Boom in50s60s last century grow older, and the new births after90s goes down obviously, therefore China Aging problem will accelerate in the coming decades. Under the condition of Aging problem, the paper propose3problems to study1. What is the tread of China population structure and its main impact elements?2. What is the impact of Aging problem to the economy development and what is the corresponding solution?3Under the condition of Aging problem, what trend of China pension income will be and what kind of change the pension policy transformation will bring?For the first problem, the paper, based on the population theory and Chinese condition, built a city town country three-layer iteration model. This model is a big improvement compared with the China population problem before, which is reflected in two aspects of diversity and dynamic. The model result shows that, the broad labor population will reach the summit1.001Billion in2016, the whole population will reach its largest level1.42Billion in2026, after that, the both will turn to go down; China dependency ratio has reached its lowest level in2011, since then it is growing up, in segmental speaking, the birth rate in town will be lower than in city, and city’s will be obviously lower than countries’. The release of Family Planning has two aspects of impact, it will add20Million people to the summit level of population, as well as make the population structure younger; in the long term, the advantages surpass the disadvantages.For the second problem, the paper analyzed the Aging problem impacts the economy development through impacting the deposit rate, capital formation and labor supply, it built a2007-2050year China population and economy dynamic computable CGE model. This model not only has the realistic value with combination of the General equilibrium theory with China society and economy feature, but also produces the equation of full life-cycle theory, accomplishes the research methodology on population and economy under the perspective CGE, it is an important innovation. Through the dynamic computing, the results show that, the China Aging problem will reduce the potential of its economy development; Even the advance in technology, external environment and other elements remain unchanged, China economy growth rate will go norm down from10%to below7%. Also it has impact on price level and industrial structure. The proper release of Family Planning will have positive impact on economy. Through the input of China Human Resource, it can ease the negative impact of demographic factor even to achieve the second population bonus. The above two policy as China Aging Problem’s corresponding solution, have been proved to be realistic and far-reaching significanceFor the third problem, the paper analyzed the current pension condition and policy, and then built a China pension balance model based on population iterative model and computable CGE model to do the search of China future pension system. The results show that, in the short term, China pension system balance gap is mainly from the transformation; in the mid and long term, the Aging problem will bring a big pressure to China pension balance. For the pension income and balance gap, the paper suggests the reform including postponing the retirement age and the allocation of state-owned shares. The detail reform is from2012, gradually allocate the state-owned shares into pension system, and reach the pension’s80%in2050; also, from2020, increase the retirement age by one year every5years. Lastly, base on the built pension income balance model, the paper compute in the impact of the reform above to the pension system. With the process of reform, it will timely ease the enormous financial pressure; avoid the pension balance gap to cause the debt crisis.There have the following mainly innovations in the answers to three questions:(1) Modeling and application of the combination of population model and the China’s urban and rural dual social structure, including the quantitative analysis of proper release the family planning policy, as well as the its effect on the economy. (2) The application and theoretical development of dynamic general equilibrium model, including a full life-cycle theory model.(3) On the perspective of general equilibrium, the quantitative impact of aging population on China’s economic development.(4) The research on the gap between China’s pension revenue and expenditure, and related reform study.Through the research on the above three problems, the paper answer the problem of relationship between Aging Economy development and Pension system, and provide a serious of valuable suggestions and solutions.