Study On The Externalities Of Rural Social Pension Insurance In China

There are 740 million rural residents in China, taking up 57% population of the whole country. At present, the economic development and the culture changes have impacted the traditional ways of care for the aged in rural areas, and have inspired the need of social pension insurance from the rural dwellers. On the other hand, there has been the essential material basis in many rural areas. So the rural pension insurance is on the edge of implementation. At this time, the studies in this field are becoming more and more important and useful.Externality theory is one of the important contemporary economics theories, and has been used in explaining and solving a lot of economic phenomenon, including market failure, pollution and public goods. Social pension insurance is a kind of semi-public goods with obvious positive externalities, and will impact other economic activities. This dissertation aims at investigating the externalities of Chinese rural social pension insurance. First, analyze the externalities of the social pension insurance, including the impact on the saving behaviors, labor provision, social welfare and economic development. Second, analyze externalities of Chinese rural social pension insurance, according to the real situation of the rural areas and under the pay-as-you-go pension scheme. Then the dissertation comes to the conclusion that Chinese rural social pension insurance has a lot of positive externalities which are discussed in the following six aspects: compensation of the farmer workers interests, narrowing the income gap between the rural and the urban, reduction and civilization of the rural population, consumption stimulation, the primary industry development, poverty reduction. At last, based on the analysis above, the dissertation provides a suggestion, that is taking good advantage of the pay-as-you-go scheme to provide those positive externalities and expand the coverage of the rural social pension insurance.