Research On The Sustainable Development Of The Rural Old-Age Pension System

After more than thirty years' implement of the "reform and opening up" policy,China has established a socialist market economy,and its economic scale and economic efficiency are continuously improved.At the same time,it also leads to the gap between urban and rural areas,as well as the unbalanced development among regions and communities.Agricultural sector and rural areas are the weak parts of the market-oriented economy,while rural residents are categorized as vulnerable group compared to urban residents.In particular,it is difficult to guarantee the basic life standard of the elders in rural areas.Although China has already established the policy of "five guarantees households",it is difficult to guarantee the decent life of the elders in rural areas,which prevent reflecting the socialist superiority of "sharing"development.Since later 1990s,China proposed the social endowment insurance system for rural residents,which is local-oriented(referred to as "Lao Nong Bao").In order to assure the elders in rural areas are fully taken care of,in 2009 the State Council issued "Guidance on the new rural social endowment insurance"(Guo Fa[2009]No.32),aiming to achieve the full coverage of the pension insurance system in rural areas(referred to as "Xin Nong Bao").Though "Xin Nong Bao"is a progress of "Lao Nong Bao",there are still some problems,such as the low level of premium payment and the unsustainability of the funds.Some factors,such as residents' willingness to be insured,the scale of insurance,the subsidies from the government,aging population and birth policy,all may have impact in the sustainability of the "Xin Nong Bao".Though some studies have consider the sustainability of the pension funds of rural areas,few studies have fully considered the determinants of sustainability.This thesis aims to study the sustainability of the pension system in rural areas.Following a complicated analysis on the pension system of China,a case study of JiangSu is conducted.JiangSu is taken as a typical area because JiangSu's economic development is outstanding.Basing on the analysis,some policy suggestions are provided.This research enrich the literature on old-age security of China,also provides new idea for the improvement of the sustainability of pension funds in rural areas in China.In order to answer the research questions regarding to the sustainabiliyt of pension insurance in the rural areas of China,this thesis first review the relevant theories,including market failure theory,public goods theory,welfare economics theory and generation transfer theory.It is argued that the endowment insurance in rural areas is similar to general endowment insurance in the sensethat it is a way to balance the saving and consuming among generations.After reviewing the policies of China,the practice of other countries,such as the US,Germany and Japan are also discussed.This thesis attempts to explore the sustainability of pension funds in rural areas of China.Therefore,the changes in institutions regarding the endowment insurance of rural areas of China are discussed,and the determinants of the sustainability are explored.Therefore,institutional changes of the endowment insurance of traditional China are reviewed.The existing problems of the traditional endowment insurance of rural areas of China,such as the level and scale of insurance,the appreciation of pension funds and pension management are analyzed,by which the reasons for the unsustainability of traditional pension systems have been found.As part of the general pension system of China,the pension system of rural areas are similar to the pension system of residents in China overall.Therefore,by making use of the panel data analysis,the general pension system is analyzed.The data includes province-level data of China since 2012 to 2015.The determinants of coverage of pension insurance,the beneficiary of pension insurance,the income of pension funds and expenditure of pension funds are estimated.In the case study of JiangSu province,the sustainability of rural pension funds are explored.By taking JiangSu as an example,this thesis studies the sustainability of the rural pension funds and local finance of JiangSu.In order to analyze the sustainability of the two aspects,the case study consider the changes of policy,the rural population which is the foundation of insurance coverage,the balance of pension funds and the balance of finance.Finally,based on the study of the sustaina'bility of pension funds of rural area and finance,the impact of longer life expectancy and the "second child" policy on the sustainability of pension are studied.Based on the theoretical and empirical analysis,the policy suggestions regarding to the sustainability of rural pension funds are provided.Compared to the existing study,this thesis makes significant contributions to the issue of independent pension funds of rural areas in China,instead of the differences among areas.This thesis makes contributions both to theory,also to practice.In addition,by making use of the data of pension funds of rural areas of China,the thesis provides a solid case study to the literature on the development of institution of pension funds of rural areas of China.