The Study Of Income Redistribution Effect Of The Basic Pension Insurance For Urban Worker

With the rapid economic development and the improvement of residents’income, the income gap has also expanded significantly. Since the basic pension insurance can narrow the income gap between residents, the government hopes that a series of pension reform can reduce income inequality further, apart from taxes and government subsidies. But it is uncertain whether the pension insurance can reduce income inequality or not after the new round of pension reforms in 2005. Therefore, it becomes the study focus on this thesis.The basic pension insurance for urban worker of Shenzhen is the study object in this thesis. This sample comes from its wages database. It is used to establish the personal wage income distribution function that can predict lifetime wages of workers. Based on this and according to the current basic pension insurance, the present value of worker’s lifetime wage income after participating in the basic pension insurance for urban worker can be calculated. Finally, a series of indicators of income inequality is used to analyze the income redistribution effect of the basic pension insurance for urban worker, the ways of income redistribution, income redistribution effects on different groups, and changes of income redistribution effect when the situation of economy is different in the future. It can assess the income redistribution effect of the current basic pension insurance for urban worker effectively. The study shows that the basic pension insurance for urban worker can narrow the worker’income gap, and the Gini coefficient of income gap among urban workers is reduced by 3 percentage points when the annual growth rate of social average wage is 4 percent in the future; If other conditions remain unchanged and the future economic situation is better, the income redistribution effect becomes stronger; for different groups, it shows that income redistribution effect between groups becomes weak, and income redistribution effect with the group becomes strong; when the annual growth rate of social average wage is high, the income redistribution effect between the groups and within the group has changed, especially gender groups.