A Study Of Pension Income Redistribution Effects From The Perspective Of New Political Economics

In the past century, our country has built a series of endowment insurance. But as time passed, the endowment cannot satisfy the request of social development. In response to this challenge, our country conducts a series of reform of endowment insurance system which is still going on. The purpose of this reform is to make the pension system to keep up with the pace of economic development, to facilitate the prosperity and stability of the society. Under this background, the analysis of how the current endowment insurance system play a regulating role in income redistribution, the assessment of the severity of the endowment insurance system to reduce the gap between the rich and the poor, is not only an important topic of academic research, but also provide a theoretical basis for the development and reform. In this paper, the pension system is carried on an examination and exploration, and the paper try to answer three questions about the income redistribution of the pension. First, whether the government should set up a national pension system in order to realize the income redistribution. Second, what is the internal mechanism of the pension income redistribution. Third, whether the endowment insurance system in China really played a due role in narrowing the gap between rich and poor or not.Thus, this paper divides into three parts. The first part is the introduction and literature review, which introduces the concept of income redistribution and related theory. It introduces the idea of "distributive justice", and analyzes the necessity of pension provided by the government. The second part is about the pension redistribution effects in theory, it introduces the pay-as-you-go system and the fully fund system, compares there different income redistribution effects. Then it introduces a simple political economics model of income redistribution, which specific quantitative the variables related to the scale of pension, and investigates the internal mechanism of the pension income redistribution effects. The third part is about the pension redistribution effects in practice, by discussing China’s pension system, it puts forward several questions about the role which the pension play in narrowing the gap between rich and the poor. Then it gives some corresponding policy recommendations.Through the analysis of pension income redistribution effect, this paper concludes that the government should strengthen the pension’s contribution in promoting "distributive justice" and handle the relationship properly between "fairness and efficiency", in order to realize the income redistribution effects which endowment insurance system should have.