Research On The Income Distribution Effect Of China's Urban Endowment Insurance System

Since the reform and opening up, China has gained remarkable achievements of economic development and social undertakings improvement, hence people from all nationalities have been benefited from the economic growth, and the aged people's income has been improving significantly. However, the redistributing role of urban pension insurance system has not played its due effect, but has continuously enlarged the income gap and disparity among the aged people. And the study from internal layer of the system can not solve the problem from the root. Ultimately the aged people's revenue problem should be placed into the entire income distribution system. The study on producing mechanism, affecting factors of system design and measures to influence the system operating for the income distribution of urban pension insurance system should be carried out from both the national side and the family side, and an ideal model should be raised as the reference to the entire system adjustment.The methods of comparative analysis, inductive analysis and econometric analysis have been adopted in this paper to analyze income distribution effects and impacting elements of China's urban pension insurance system. Based on the existing urban pension insurance system, this paper has presented an ideal model from the following four aspects:(1) listing related theory and research on pension insurance and income distribution, making a detailed comparison of different theory and research on pension insurance and income distribution;(2) Inducing regularity of pension income distribution patterns in different occupations of China's urban areas, and analyzing the risk identification, risk transfer and triggers for aged people's income distribution; Analyzing signals of the risk transfer mechanism for the elderly to the levels of state, society and individuals;(3) Basing on the comparative results of foreign and domestic pension insurance system, and inducing three types of effects from urban pension insurance upon income distribution, namely as inductive effects, participation effects and substitution effects; Analyzing the basic content and mechanism of three types of effects separately and drawing the corresponding conclusions;(4) Conducting a comprehensive analysis of interaction of these three types of effects and basic operating ways, reflecting upon the existing pension system analysis and policy expectations and measurement; Selecting effect factors and adopting VAR model to testified, and then proposing an ideal model of urban pension insurance and endowment insurance system reform methods in line with China 's basic national conditions. Based on the above research, this paper comes to the following main conclusions:(1) Basing on the comparison of the time series of inter-provincial urban pension insurance, the urban pension levels are declining along with the decline of labor compensation's percentage in GDP. So the pension system does not narrow the gap of income distribution but enlarged it;(2)The urban pension insurance system does not effect well in guiding or participating in the income distribution, but plays a negative role of substitution effect significantly, instead the interest difference of financial subsidies attracts more potential insured people and acts as guiding effect.(3) Enterprises has improved compensation for workers to stimulate employees to continuously improve labor productivity. And social risks, raising from aged people's income gap getting wider, have been transferring from developed areas to less developed regions, and from low-income to high-income earners. Probably, the existing urban pension insurance system may have caused above social risks.(4)Analyzing from the reasonableness, comprehensiveness, affordability and necessity of satisfactory level by adopting these three effects in the current urban pension insurance system, then a conclusion that the current urban pension insurance system needs to be adjusted further has come into being.(5) The thought on adjustment to current urban pension insurance system in China has been raised. The general idea is to create a multi-supporting pension system compatible with economic development, hence to achieve the effects of income distribution covering by urban pension insurance system. The ideal model of urban pension insurance should be formed of three layers:the bottom layer is the foundation for pension insurance (including personal accounts and local surcharges). The second layer is the occupational pension, and the third layer is composing of flexible private commercial pension insurance plans and private individual pension savings plans.