Research on intertemparal optimization of partially funded pension reform

Abstract

This paper studies the impact of the social security reform on the efficiency of economic equilibrium in a typical overlapping generation model. It is founded that there is a Pareto-improving of pension system reform from pay-as-you-go system to partially funded system under this paper's settings: improve the economic growth, increase equilibrium consumption, decrease income difference and improve social welfare. The result is helpful for policy choice of investment of China's social security fund.