International Journal of Business Economic Development最新文献

{"title":"The Effect of an Expansion of the Pay-as-You-Go Social Security System in China","authors":"Shuanglin Lin","doi":"10.1142/9789812812605_0005","DOIUrl":"https://doi.org/10.1142/9789812812605_0005","url":null,"abstract":"Abstract China is in the process of industrialization with a large amount of the labor force moving from the agricultural sector to industrial sectors. An expansion of the pay-as-you-go social security system benefits current urban retirees, and may solve the social security payment problem faced by many state enterprises. Also, although facing a declining population growth rate, China may not have a social security crisis under a pay-as-you-go social security system just covering the wage earners, as many industrialized countries face. However, the expansion of the pay-as-you-go social security system may have an adverse effect on capital accumulation in the long run, hurting the rural old, and either benefiting or hurting the wage earners in urban areas before the completion of industrialization, and is likely to reduce wage earners' welfare after industrialization. Introduction As economic reforms in other areas proceed in China, social security reform has become urgent. China has a pay-as-you-go social security system which covers only a small portion of the population. The social security reform can go different directions: expanding the existing system to cover more people, or privatizing the present system by establishing individual accounts, or a combination of the two. This paper analyzes the effect of an expansion of the current pay-as-you-go system on the Chinese economy. Many countries in the world provide social security to their residents. Most social security systems are pay-as-you-go in nature, i.e., government collects taxes from the working generation to finance the benefits to the retired generation. This system is also called an \"unfunded system\" because the benefit received and the taxes paid by an individual may not be the same. Under this system population growth will benefit each generation since there will be more young people supporting the retirees. Problems arise when the population growth rate begins to decline, i.e., each generation has to pay more and more to keep the parent generation as happy as their grandparent generation. As capital markets become well-developed, it is also possible for a person to provide old-age security for him- or herself. When working, each individual deposits a portion of his or her salaries into a fund. Over time the fund would accumulate interest, and on retirement, each individual receives the principal and accrued interest as old-age security benefits. This form of old-age security can be called \"individual security,\" and it is a fully-funded system because individuals receive exactly what they paid in terms of the present value. Recent research on Chinese social security reforms have identified two major problems China's new social security system must solve. One is to reduce the social security burden of the state enterprises, and the second is to avoid a social security crisis due to the decrease in the population growth rate (Zhou and Wang, 1994; and the World Bank, 1997). To solv","PeriodicalId":30779,"journal":{"name":"International Journal of Business Economic Development","volume":"07 1","pages":"451"},"PeriodicalIF":0.0,"publicationDate":"1999-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85965251","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Some Suggestions from the U.S. Experience on How to Establish a Social Protection System with Chinese Characteristics","authors":"G. Chu, Dasong Deng","doi":"10.1142/9789812812605_0012","DOIUrl":"https://doi.org/10.1142/9789812812605_0012","url":null,"abstract":"Abstract This paper examines the Chinese social protection system within a broader framework. First, it points out some of the valuable U.S. experience. It then discusses policy implications that are relevant to the current reform in China. From the U.S. experience, ten suggestions are proposed on how to establish a social protection system with Chinese characteristics. Specially, this paper suggests that China (1) reform the social protection system gradually, (2) broaden and improve social assistance and welfare programs, (3) encourage the development of private insurance, (4) establish a social protection system with multiple layers, (5) determine insurance benefits based on basic needs, (6) ensure adequate funds for all social protection programs, (7) establish an income record system, (8) establish a poverty-line system, (9) establish a social protection trust fund commission, and (10) unify the management and administration of social protection programs. Introduction The social protection system of the United States has been evolving for many years. It has accumulated a vast amount of experience through path-breaking changes and reforms. Some of this experience is general and broad. Although it has emerged in the design of a social protection system of a developed country, it can be used to help formulate social protection policies for developing countries. Therefore, to the extent that the U.S. experience reflects basic principles of social protection, people in China should be able to learn from this in order to shorten the process of trial and error, and thus save a tremendous amount of time and money. In so doing, we should not ignore the differences in each country s social, political, and cultural backgrounds. We need to examine the development of the U.S. social protection system and selectively recommend those elements that are relevant to the special conditions existing in China. There is a growing literature on the subject of social security reform in China (Deng et al., 1997; Hussain, 1994; Liu, 1991; Liu et al., 1994; Song et al., 1998; World Bank, 1997). However, most previous articles have focused on pension system and health-care reforms. Little has been done in other social protection areas such as social assistance, welfare programs, and private insurance. In this paper, we examine Chinese social protection within a broader framework. First, we point out some of the valuable U.S. experience that can help develop a better Chinese social protection system. We then discuss policy implications that are relevant to the current reform in China. From the U.S. experience, we propose ten suggestions on how to establish a social protection system with Chinese characteristics. Reform the Social Protection System Gradually The U.S. social protection system has evolved gradually over decades. Although politics was involved in the system development and expenditures on some programs at times exerted pressure on government fiscal imbalanc","PeriodicalId":30779,"journal":{"name":"International Journal of Business Economic Development","volume":"44 1","pages":"398"},"PeriodicalIF":0.0,"publicationDate":"1999-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89071194","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}