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Feedback analysis of population, economy and pension: Moderate scale of China’s pension strategic reserve

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  • Tang, Yunshu
  • Ruan, Yaoyun
  • Xu, Yongqing
  • Li, Yaokuang

Abstract

This paper puts the population, economy and pension into a unified framework, analyzes the interactive feedback mechanism between them, and builds a system dynamics model to explore the moderate scale of China’s pension strategic reserve from the following three perspectives: whether it can resist the pension payment crisis in future according to the current growth rate; if the pension gap is completely filled by the reserve, what size of the reserve needs to reach; a moderate range of the reserve when local governments are jointly responsible for filling the gap. The empirical research shows: the reserve cannot resist the pension payment crisis; the reserve needs to reach 54.21 trillion RMB before the gap appears, under the condition of fully filling the gap; the reserve needs to reach the range of 19.96 trillion to 39.51 trillion RMB before the gap appears with the participation of local governments.

Suggested Citation

  • Tang, Yunshu & Ruan, Yaoyun & Xu, Yongqing & Li, Yaokuang, 2020. "Feedback analysis of population, economy and pension: Moderate scale of China’s pension strategic reserve," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 551(C).
    • Handle: RePEc:eee:phsmap:v:551:y:2020:i:c:s0378437119322368
    DOI: 10.1016/j.physa.2019.124043
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    References listed on IDEAS

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    5. Giam Cipriani, 2014. "Population aging and PAYG pensions in the OLG model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(1), pages 251-256, January.
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