Application Of Two-error Lee-carter Model In New Rural Socia Pension Insurance

National financial help is the main difference between the new rural endowment insurance andthe old rural endowment insurance, whether or not the financial help can fulfill its assistance, is thekey to develop of New Rural Social Pension Insurance (NRSPI). So studying the balance of NRSPIis important for us to analyze national financial support. The life expectancy of the rural populationis close to the balance of NRSPI. The decline in mortality rates also means that the life expectancyof population is constantly extended. The international trend indicates using the dynamic model ofmortality to analyze life expectancy of the population could predict the future life expectancy moreaccurately.Lee-Carter model is a classical dynamic mortality model. Firstly, the model was improved bychanging the single error model to two-error model, which were used to measure mortalityfluctuations caused by different ages, different time, to a certain extent, solve the problem of theclassic Lee-Carter model to predict positively skewed. Then this paper analyzes situation as well asdevelopment trends of China’s rural female and male morality, and uses the two-error Lee-Cartermodel to predict the future sex-age-specific rural population mortality, and predicts the populationstructure and population life expectancy each year to2020.Finally, this paper analyzes pensionfund-raising mode and the balance of payments in the NRSPI, and establish year-macro-recursivemodel to forecast the country expenditure in the different class of endowment insurance anddifferent fill probability case, and puts forward suggestions according to forecasted financialexpenditures.This paper is divided into five chapters.In Chapter1, we will research status and significance, mortality rate model, the balance modelof payments in the NRSPI are introduced.In the second chapter, life table, mortality prediction model, the classic Lee-Carter model arebriefly introduced, the error term of the original Lee-Carter model is analyzed in detail, andproposes an improved model on the basis of original model—two-error model, changing the errormodel to two independent random errors, with the result that variance of improved Lee-Cartermodel is smaller than the original model.The third chapter analyzes the state’s financial responsibilities in the NRSPI, and introducesthe principle of participants’ payment and drawing pension. From a macro perspective, recursivemodel is used to build income and expenditure model in the NRSWI, with forecasting the expenditure.In the fourth chapter, the two-error Lee-Carter model is fitted by China’s rural populationmortality data, and then forecasts future mortality rates and life expectancy, and thus the balance ofstate financial is predicted by year-macro-recursive model in the NRSPI.The fifth chapter is the conclusion of this article.