China's Urban Social Welfare Pension System Effects Of The Transition

How to improve town pension insurance system, and establish a long-term mechanism for the even running of our country's pension insurance system has been concern for academia and government. From the perspective of welfare economics, this article seriously discusses the welfare effects of our country's old-age insurance system reform.Firstly this article tides up domestic and international publications in pension system transition. The international publications has made theoretical and statistical analyses of old-age insurance system reform from the perspectives of fairness and efficiency, which provides theoretical basis for my research, though their researches on the welfare effects of China's town pension systems are quite few and incomplete. Domestic publications focus on the existing problems in old-age insurance system reform and its effects on the growth of macro-economy, which cannot shake off the fetters of the traditional western insurance theories and stresses too much on insurance redistribution to pursue society fairness, and needs to extend to the study on the welfare effects brought by the influencing factors of the old-age insurance system.Our country's town pension insurance system has undergone two developing stages from pay-as-you-go system to partially accumulated system now. The main problems of the existing systems are limited coverage, weak incentive function, empty personal accounts, and being difficult to collect insurance premium, etc., These problems have great influences on the existing town pension insurance system reform.Starting from the over-lapping generation model by Samuelson, this article makes both quantitative and qualitative analyses on the welfare effects of our country's old-age insurance system reform. Then it makes the following conclusions that firstly the welfare of town residents rises when the government decreases the percentage of insurance premium paid by town residents. In other words, if the government changes the existing partially accumulated system to the funded system, the consumer utility would be increased. Secondly if the government decreases the percentage of empty account and social pool fund, the welfare of consumers can be greatly increased. That means the government needs to be carefully consider which model to choose when transfer the transition cost because model is crucial to consumer welfare.Finally, the article makes the conclusion that in order to improve and safeguard the effective and healthy running of our country's town pension system, our country should do the following jobs, to establish multiple-level old-age insurance system, decrease the percentage of insurance premium paid by town residents, increase the coverage and transform administrative fees into taxes, etc.