| China’s ageing population has entered the stage of rapid development at present.The growing elderly people has not only caused the payment issue of public pension,but also posed a great challenge to the sustainability and fairness of the endowment insurance system.According to the data of China’s National Bureau of statistics,the average replacement rate of pension for urban workers shows a downward trend year by year,which not only directly affects the well-being of the elderly people,but also relates to the fairness of society.The state of income distribution has always been concerned by the government and academia.The report of the 19 th National Congress of the Communist Party of China clearly pointed out that the main contradiction has been transformed into the contradiction between the people’s growing needs for a better life and unbalanced and insufficient development in society nowadays.How to reduce income inequality by adjusting income distribution is an important issue to the government and academia.The endowment insurance has always been regarded as an important institutional tool to adjust income distribution.Under the impact of population ageing,how will the policy effect of endowment insurance system regulating income distribution change? This is a theoretical and practical problem which is worthy of our in-depth thinking.The contribution base limit,contribution base reform,contribution rate adjustment,and the method of calculating the pension payment,pension determination and payment of the endowment insurance system,and public capital income allocation to pension funding are all system designs or reforms with Chinese characteristics.Based on this,the study constructs a three-period overlapping generations model including the heterogeneity of human capital to analyze the impact of population ageing and the endowment insurance system on the evolution of income inequality.The study depicts population ageing from the two dimensions of increased life expectancy and declining fertility,and the system designs characteristics of the endowment insurance are depicted carefully in the model.The study analyzes income inequality from three aspects which are intra-generational income inequality of the employees,intra-generational income inequality of the retirees and inter-generational income inequality.Intra-generational income inequality of employees measures the wage income and disposable income gap after contribution of the same generation group,and intra-generational income inequality of retirees measures the pension income gap of the same generation group,intergenerational income inequality measures the income gap between employees and retirees in the same period.The main research contents and conclusions are as follows.Firstly,this study discusses the impact of contribution mechanism design on income inequality from three aspects which are contribution base limit,contribution base reform and contribution rate adjustment.First,the contribution base limit can not only limit the pension boundary,but also cause the regressivity of contribution and change the income and expenditure of the pension funding.The study found that compared with not setting the contribution base limit,setting the contribution base limit can increase wage income inequality and disposable income inequality,reduce pension income inequality,while its impact on inter-generational income inequality is uncertain.In conclusion,setting the contribution base limit can reduce the overall income inequality in the short term and increase the overall income inequality in the long term.Second,the reduction of the approved social average wage which means the contribution base reform can reduce the contribution base limit and the income of the pension funding,while its impact on the contribution burden gap and contribution index gap of different groups is uncertain.Compared with before the reform,the wage income inequality and disposable income inequality will reduce,the pension income inequality will increase in the short term and reduce in the long term,and the inter-generational income inequality and overall income inequality will increase after the reform.Third,the decline of the contribution rate of the social account can weaken the regressivity of contribution,reduce savings and widen the children’s education investment gap,and reduce the average replacement rate of basic pension.After reducing the contribution rate of the social account,wage income inequality,pension income inequality and inter-generational income inequality will increase,and disposable income inequality will reduce in the short term and increase in the long term,and the overall income inequality will increase.If the contribution rate of individual account will reduce,then the disposable income inequality will reduce,and the pension income inequality,inter-generational income and overall income will increase.Secondly,this study discusses the impact of the method of calculating the pension payment and pension determination and payment on income inequality.First,the method of calculating the pension payment not only reflects the positive redistribution function of the endowment insurance system,but also links the pension with the social average wage of the next generation,and establishes a pension adjustment mechanism.The replacement rate of pension of low-income groups is relatively high,so they will use a lower proportion of wage income for savings and a higher proportion of wage income for children’s education.Under the transmission mechanism of "education investment-human capital-wage income",wage income inequality will reduce.As the pension income gap is lower than the wage income gap of the same generation group,pension income inequality will further reduce.The method of calculating the pension payment will not affect the evolution path of intergenerational income inequality,so the intra-generational and overall income inequality show a downward trend with the increase of the period.Second,when life expectancy,fertility and contribution rate remain unchanged,the pension determination and payment will not affect the evolution of income inequality.Then,this study discusses the impact of public capital income allocation to pension funding on income inequality.First,after the public capital income allocation to pension funding,the pension funding and the average replacement rate of basic pension will increase,which will not only reduce wage income inequality through the human capital incentive effect of the endowment insurance,but also further reduce pension income inequality by increasing basic pension income.Second,the public capital income allocation to pension funding can reduce the accumulation of material capital and increase the average replacement rate of pension in the individual account,and the inter-generational income inequality will decrease due to the increase of the average replacement rate of pension.Therefore,the public capital income allocation to pension funding is conducive to reducing the overall income inequality.Finally,this study also discusses how population ageing affects income inequality through the design of endowment insurance system.On the one hand,the increased life expectancy can reduce the overall income inequality through the contribution base limit,but the impact is weak.On the other hand,the increased life expectancy can increase savings,reduce the average replacement rate of basic pension and change individual education decision-making,which will enhance the positive effect of the method of calculating the pension payment on intra-generational income distribution,so as to reduce intra-generational income inequality.The declining fertility rate can reduce the average replacement rate of basic pension and increase the per capita material capital,while the declining fertility has no net impact on intra-generational income inequality when fertility costs are not considered.At the same time,the increased life expectancy and the declining fertility can change the inter-generational population structure and reduce the average replacement rate of basic pension and individual account pension,thus the inter-generational income inequality will increase.To sum up,the population ageing will increase the overall income inequality through the design of the endowment insurance system,and even reverse the downward trend of the overall income inequality.The contribution base reform and contribution rate adjustment will further increase the overall income inequality.The public capital income allocation to pension funding will alleviate the negative impact of population ageing on income inequality through the design of endowment insurance system.In addition,this study also discusses the differential impact of population ageing on income inequality through the design of endowment insurance system when the average replacement rate of basic pension is not reduced by increasing the contribution rate.The study found that the increased life expectancy and the declining fertility will reduce the overall income inequality in the short term,while the increased life expectancy will increase overall income inequality in the long run,and the impact of the decline of fertility on overall income inequality will become unclear in the long run.Combined with the background of population ageing and the policy goal of reducing income inequality,this study puts forward some policy suggestions.First,reducing the lower limit of contribution base and increasing the upper limit of contribution base appropriately can achieve the policy goal of reducing overall income inequality and not increasing the contribution burden of low-income groups at the same time.Second,reducing the contribution rate of the social account will increase income inequality,while balanced development of multi pillar pension security will help to alleviate the negative impact of the rate adjustment policy on income distribution.Third,the method of calculating the pension payment should be further inclined to low-income groups in order to give better play to the income distribution effect of the endowment insurance system.Fourth,in order to achieve the policy goal of reducing the rate without reducing the pension,the proportion of public capital income allocation to pension funding should be adjusted in time according to the age structure of the population.Fifth,in the face of the challenge of population ageing caused by the increased life expectancy,we should not only realize the positive regulatory effect of the increased life expectancy on intra-generational income distribution through the endowment insurance system,but also realize the negative impact of the increased life expectancy on inter-generational and overall income inequality.Sixth,the increased fertility can relieve the population ageing and income inequality,therefore it is suggested that the government should implement the subsidy policy,work welfare policy and maternity leave policy to support family parenting,so as to help increase the fertility level.Compared with existing studies,the marginal contribution of the study is mainly reflected in the following aspects.First,the study puts forward a new mechanism that population ageing affects income inequality through the design of the endowment insurance system in theory.Existing studies have focused on analyzing the direct impact of population ageing on income inequality through age structure effect,and there are relatively few discussions on the specific impact mechanism and path.Second,the study improves the analysis of the impact mechanism of the design of the endowment insurance system on the long-term dynamic evolution of income inequality.In the overlapping generation model with the endowment insurance system design,the existing studies usually only set a simple national pension system and ignore many system designs.Therefore,it is difficult to clarify the impact of specific system design on the evolution of income inequality.Third,the study expands the research on the impact of the endowment insurance system on income distribution from the perspective of intra-generational,inter-generational and overall income inequality.Most studies about the endowment insurance system and income inequality have not distinguish intra-generational,inter-generational and overall income inequality in combination with the characteristics of the endowment insurance system,this study provides a useful supplement.In the last,combined with population ageing and the policy objectives of reducing income inequality,the study discusses the optimal design of the endowment insurance system,which provides ideas for China to deal with the challenge of population ageing and reduce income inequality by optimizing the design of the endowment insurance system. |
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