The Balanced System with Optimal Replacement Rate of China's Basic Social Pension Insurance:Empirical Analysis Based on die Overlapping Generations Model

With the population aging phenomenon exacerbated by the basic pension insurance system so that the government is facing a heavy financial burden,but also led to scholars' in - depth study of the optimal replacement rate of basic pension insurance.Based on the overlapping generations model,combined with the latest, the most reasonable data from the static and dynamic modeling,we performed the empirical analysis of the optimal replacement rate of China's basic social pension insurance and balanced index system.First of all,we figured out how replacement rates,population growth rate and mortality rate would affect indicators in the social equilibrium system.Increasing replacement rate for social pooling pension leads to increase in the value of the social pooling account as well as the decrease in the level of consumption.It also causes the drop in the value of personal accounts pension and savings,which implies the shrinking of total social savings.Consequently,this leads to a higher interest rate and a lower wage.On the contrary,the replacement rate for personal account pension has a different influence.A higher replacement rate for personal account leads to a decrease in both personal consumption and savings but increases the total social savings,which equals to the sum of personal pension and personal savings.In the paper,we also researched into the effect of population growth rate and mortality rate on optimal replacement rates.It is indicated that the higher population growth rate,the higher optimal replacement rate for social pooling pension and the lower optimal replacement rate for personal pension.It is found that lower mortality rate leads to lower replacement rates for both social pooling pension and personal pension.