Study On The Externalities Of Rural Social Pension Insurance In China

The Social Insurance System for the Aged in Rural Areas is an important part of China’s social security system, but it’s also a weak link in this system. With the aging problem of China’s rural population growing increasingly serious, the support from the family and the land becomes insufficient, and the traditional rural mode for caring for the aged is challenged. In2009, the trial test for the New-pattern Social Insurance System for the Aged in Rural Areas began nationwide. And it is still in the system construction phase. In this context, theoretical studies is very important for the practice of the system.Externality theory, as an important economics theory, is widely used in the study of public goods, market failure, environmental pollution, and other fields. The Social Insurance System for the Aged in Rural Areas, as a future public product, has obvious positive externalities. This essay takes the externalities of the Social Insurance System for the Aged in Rural Areas as its object of study, and analyzes the development of the system from the angle of externalities.First of all, through the study of the evolution of the Externality Theory, it is found that the themes generally follow the sequence of market externalities, government intervention, externalities of government behavior, and constraint for the government. From the studies we can come to the conclusion that we need to control not only the externalities of the market, but also the externalities of government behavior, which sets a theoretical foundation for the analysis in the text. Based on theory, the essay does detailed study on the external economic effects of the Social Insurance System for the Aged in Rural Areas. Then comes the study of the development process of the Social Insurance System for the Aged in Rural Areas, which is divided into two stages according to its degree of socialization and the amount of responsibility the government carries, namely the traditional system and the new-pattern one. By comparing the two systems, a conclusion is reached that the design of the new-pattern system is more conducive to the functioning of the externalities. After that, a detailed theoretical analysis is made on the Social Insurance System for the Aged in Rural Areas, it being a social insurance system for the aged, a public product, and a product with positive externalities. The text analyzes manifestations of the huge externalities of the Social Insurance System for the Aged in Rural Areas in terms of social equity, social stability, population policy, agricultural development, consumption, investment, Rural Minimum Living Security System, and pro-poor policies. Through the study of the externalities of the Social Insurance System for the Aged in Rural Areas, it is concluded that the system has great positive externalities. Taking the question of how to facilitate effective functioning of the positive externalities as an opening, the essay goes on to point out that the positive externalities of the system is greatly restricted from functioning in the context of a free market. A solution is put forward that government should intervene, and promote the functioning of the positive economic externalities by protecting property rights, providing financial subsidies and raising the orchestration level. Based on the extension of the externality theory from the market field to the government, a view is expressed that the externalities of the Social Insurance System for the Aged in Rural Areas is not all that need studying. The negative externalities caused by the intervention of the government will also affect the policies in dealing with the externalities of the Social Insurance System for the Aged in Rural Areas. Therefore the way to deal with the negative externalities caused by government intervention should also be taken into consideration. We should conquer the negative externalities of government behavior and optimize its regulation of the system by establishing a sound legal system, perfecting the democratic system, setting up an evaluation system for the Social Insurance System for the Aged in Rural Areas, and increasing performance evaluation and information disclosure. The ways to deal with the externalities of the Social Insurance System for the Aged in Rural Areas and the intervention of the government should all serve the purpose of providing a sound product of the Social Insurance System for the Aged in Rural Areas.