【Speaker】YANG Zaigui, Professor at Central University of Finance and Economics
【Topic】Optimization of Bookkeeping Interest Rate and Contribution Rate in Chinese Basic Old-Age Insurance
【Time】Wednesday, June 14, 14:00-15:30
【Venue】Room 385, WeiLun Building, Tsinghua SEM
【Organizer】China Center for Insurance and Risk Management (CCIRM); Department of Finance
【Abstract】By employing an overlapping-generations model, this paper investigates the basic old-age insurance for enterprise employees in China. Envisaging the fact of the bookkeeping interest rate being lower than the market interest rate, we examine the effects of the individual contribution rate, firm contribution rate and bookkeeping interest rate on the capital-labor ratio, per capita consumption and pension benefits. We also find the optimal combination of the policy variables. Under the circumstance of fallen population growth rate, we estimate the optimal bookkeeping interest rate while the population aging peak and look for its realization form. Raising the bookkeeping interest rate and individual contribution rate and reducing the firm contribution rate can increase the pension benefits, consumption and capital stock. If the optimal bookkeeping interest rate can be higher than the five year bank deposit interest rate, it can not only reduce the optimal individual contribution rate, but also greatly reduce the optimal firm contribution rate.