1. Rationalization and Old-Age Pension System Reform: Lessons for China from Latin America.
- Author
-
Calvo, Esteban B.
- Subjects
OLD age pensions ,REFORMS ,SOCIAL security ,SOCIAL policy ,PENSIONS ,COMPARATIVE sociology - Abstract
By 2025, one quarter of the world's population aged 60 and over will be living in China. Therefore, the success or failure of China to reform its old-age pension system will affect a major proportion of the world's population. This paper explores old-age pension reforms in Latin America in an effort to obtain insights about the potential consequences of reforms in China. While numerous Western countries first experienced a cultural rationalization, then economic modernization, and after that faced the challenges of population aging, both Latin America and China are dealing with pension system reforms in the context of much less developed economies and stronger traditional cultures. The analysis presented in this paper suggests that these distinctive characteristics will shape the consequences of the reforms being implemented in China. First, financing the reform could be hard in a low income country and non-rationalized society prone to evasion and corruption problems. Second, China is likely going to be a traditional society where the traditional formulas to secure old-age income security are becoming stressed. Accordingly, China needs to improve the coverage of its old-age social pension system to provide alternative sources of income at older ages to the traditional family arrangements. However, there is no evidence in Latin American old-age pension reform suggesting that coverage of the Chinese system could become close to universal in the following decades. Therefore, family arrangements seem likely to continue being important sources of well-being at older ages. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]
- Published
- 2006