Research

22 pages, 1468 KiB

Open AccessArticle

Assessment of the Financial Sustainability of China’s New Rural Pension Plan: Does the Demographic Policy Reform Matter?

by Huan Wang, Jianyuan Huang and Shuangyue Sun

Sustainability 2019, 11(18), 5110; https://doi.org/10.3390/su11185110 - 18 Sep 2019

Cited by 5 | Viewed by 2686

Abstract

Rural China is experiencing a rapid aging process caused by low fertility and large-scale rural-to-urban migration, which will place an increasing payment burden on the rural pension plan. To allay the negative impact of the aging transition, China has recently carried out a [...] Read more.

Rural China is experiencing a rapid aging process caused by low fertility and large-scale rural-to-urban migration, which will place an increasing payment burden on the rural pension plan. To allay the negative impact of the aging transition, China has recently carried out a demographic policy reform, replacing the famous one-child policy with the two-child policy. This paper evaluates the impacts of the demographic policy reform on the financial sustainability of China’s New Rural Pension Plan (NRPP). By applying the cohort component population projection method and building actuarial models, the solvency sustainability of the NRPP between 2019 and 2080 is estimated under six demographic policy scenarios, followed by sensitivity analysis. The simulation results show that under the one-child policy, the current and the accumulated pension fund would run deficits in 2030 and 2042, and then the pension deficits would expand rapidly. The two-child policy would relieve the pension pressure moderately before 2075, but thereafter, the pension deficits would become much worse. Sensitivity analysis of a series of demographics and pension parameters on the financial sustainability of the NRPP are displayed. On average, the long-term pension gap may not be avoided for the NRPP, regardless of raising the contribution rate, delaying the retirement age, or encouraging people to have more children. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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16 pages, 901 KiB

Open AccessArticle

Employability and Sustainability of Young Graduates in the Slovak Labour Market: Counterfactual Approach

by Lucia Svabova, Marek Durica, Katarina Kramarova, Katarina Valaskova and Katarina Janoskova

Sustainability 2019, 11(16), 4462; https://doi.org/10.3390/su11164462 - 18 Aug 2019

Cited by 9 | Viewed by 5285

Abstract

A necessary condition for economic development and raising living standards in Slovakia is to address employment issues in a way that would inter alia contribute to employment sustainability. This important fact mirrors in the study that directly analyses the employability and sustainability of [...] Read more.

A necessary condition for economic development and raising living standards in Slovakia is to address employment issues in a way that would inter alia contribute to employment sustainability. This important fact mirrors in the study that directly analyses the employability and sustainability of young unemployed jobseekers, participants of the intervention “Graduate Practice”, in the Slovak labour market in 2014–2017 by applying a counterfactual approach. The intervention is one of the active policy measures in the labour market, and its implementation is subject to the specifics of the excluded group of the unemployed. Its aim is to help the members of the group find a job and gain work experience and habits. The impacts of the intervention on the employability and sustainability of young graduates were evaluated based on real data using the caliper-matching technique, the technique of the propensity score-matching method. The intervention database was relatively robust and included 42,626 participants over a 24-month impact period. In the analysis, we considered both the effectiveness and efficiency of the Graduate Practice. The findings point to no or very weak effects of the intervention, especially to the long-term sustainability of jobs. However, its impact on the state budget we consider as positive due to the intervention’s ability to reduce total costs of unemployed graduates. From the methodology point of view, the use of the method is appropriate in finding possible imbalances in the active and passive policies of the labour market. The results of the study themselves have the explanatory power not only for Slovak policymakers but also for policymakers at the level of the European Union. The results are helpful in creating other interventions and setting their conditions for future periods to bring a desired effect on employability and sustainability of members of excluded groups in general. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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17 pages, 235 KiB

Open AccessArticle

Indigenous Social Policy and Social Inclusion in Taiwan

by Jiun-Hao Wang and Szu-Yung Wang

Sustainability 2019, 11(12), 3458; https://doi.org/10.3390/su11123458 - 24 Jun 2019

Cited by 7 | Viewed by 3507

Abstract

Social exclusion problems are inevitable in achieving social sustainability. Minorities or indigenous people encounter social exclusion from mainstream society in many countries. However, relatively little is known about the multiple disadvantages in different social welfare domains experienced by these indigenes. The objective of [...] Read more.

Social exclusion problems are inevitable in achieving social sustainability. Minorities or indigenous people encounter social exclusion from mainstream society in many countries. However, relatively little is known about the multiple disadvantages in different social welfare domains experienced by these indigenes. The objective of this study is to address indigenous social exclusion by focusing on their access to social welfare benefits. Data used in this study were drawn from the Social Change and Policy of Taiwanese Indigenous Peoples Survey, which included 2040 respondents. Logistic regression results revealed that, compared with their counterparts, the likelihood of being excluded from social welfare payments is higher for those who are plains indigenes, live outside of designated indigenous areas and participate less in local organizations. Besides varying the effects of ordinary explanatory variables on social exclusion across different exclusion models, this study further provides empirical evidence of the multidimensional disadvantages of indigenous peoples in receiving needed social welfare benefits. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

20 pages, 1052 KiB

Open AccessArticle

Assessing Minimum Wage Policy Implications upon Income Inequalities. The Case of Romania

by Eva Militaru, Madalina Ecaterina Popescu, Amalia Cristescu and Maria Denisa Vasilescu

Sustainability 2019, 11(9), 2542; https://doi.org/10.3390/su11092542 - 01 May 2019

Cited by 3 | Viewed by 3712

Abstract

Starting from the consideration that excessive income inequalities could hamper sustainable growth, our paper aims to evaluate the impact of the minimum wage policy upon wage and income distributions. Using the European Union Survey on Income and Living Conditions (EU-SILC) database with national [...] Read more.

Starting from the consideration that excessive income inequalities could hamper sustainable growth, our paper aims to evaluate the impact of the minimum wage policy upon wage and income distributions. Using the European Union Survey on Income and Living Conditions (EU-SILC) database with national representative sample of households, an income distribution analysis was conducted for the case of Romania based on two microsimulation approaches. The first one assumed building a counterfactual income distribution under the hypothesis of no change in minimum wage, while the second one implied a decomposition of the Gini coefficient of income inequalities based on main income determinants, including the minimum wage level and the share of minimum wage earners in the total number of employees. Both approaches pointed to similar findings, indicating a positive effect of the minimum wage on wage inequalities reduction for both genders, although higher for women, as they are more present among lower paid employees. The minimum wage policy can reshape the wage distribution, by enlarging the share of minimum income earners and narrowing the middle. Moreover, the household disposable income becomes less unequal when minimum wage increases, meaning that the income gain spreads over the entire household as most minimum wage earners come from poor households with numerous children. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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16 pages, 271 KiB

Open AccessArticle

Effect of Social Security System on Consumption through Income and Uncertainty: Evidence from China

by Xiaoyu Deng, Jing Tian and Rong Chen

Sustainability 2019, 11(7), 1828; https://doi.org/10.3390/su11071828 - 27 Mar 2019

Cited by 4 | Viewed by 3125

Abstract

In our paper, we test how the social security system affects citizens’ consumption behavior through narrowing the income gap between residents with different social status and decreasing the uncertainty of income and cost. In the theoretical part, we firstly extend the model of [...] Read more.

In our paper, we test how the social security system affects citizens’ consumption behavior through narrowing the income gap between residents with different social status and decreasing the uncertainty of income and cost. In the theoretical part, we firstly extend the model of Keynes to test the income distribution hypothesis; then, we use the coefficient of absolute risk aversion (CARA) model and a two-period model to test the uncertainty hypothesis. Empirically, (1) we use China’s data (2003–2012) to test the theoretical results, and find that the social security system has a positive effect on consumption by reducing the income gap; (2) according to a 10-year panel data (2003–2012), we find that reducing income uncertainty can increase consumption. Besides, medical insurance and endowment insurance have a positive impact on consumption by reducing citizens’ cost uncertainty, but to different extents. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

16 pages, 215 KiB

Open AccessArticle

Reinterpreting the Connotation of “Sustainability” and the Expansion of Social Policy in China

by Tao Liu, Yuxin Li and Tong Tian

Sustainability 2019, 11(6), 1814; https://doi.org/10.3390/su11061814 - 26 Mar 2019

Cited by 5 | Viewed by 3138

Abstract

This article examines the interplay between welfare ideas and institutional development and then seeks to explore the ideational background for social policy expansion in China. It focuses on the welfare semantics and narratives that underpin the grand social policy transformation since the millennium. [...] Read more.

This article examines the interplay between welfare ideas and institutional development and then seeks to explore the ideational background for social policy expansion in China. It focuses on the welfare semantics and narratives that underpin the grand social policy transformation since the millennium. The primary research question concerns whether the approach of “sustainability” is related to social policy in China, and, if yes, how and to what extent. Through the analysis of academic literatures and government documents on social policy in China, we explore the new “sustainability approach” to Chinese social policy that is constructed by social experts and international agencies. While the old sustainability approach overwhelmingly links the “sustainable development” of social policy to the issue of financial affordability and the adequacy of benefit levels, the newly interpreted approach highlights the significant meaning of social policy for long-term and inclusive development over the upcoming decades. Against this backdrop, a holistic national plan for socio-economic modernization has incorporated social policy. Beyond economic and ecological objectives, social development with a focus on social policy has become a key pillar of sustainable development in China. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

16 pages, 1525 KiB

Open AccessArticle

The Market Treadmill Against Sustainable Income of European Farmers: How the CAP Has Struggled with Cochrane’s Curse

by Bazyli Czyżewski, Andrzej Czyżewski and Łukasz Kryszak

Sustainability 2019, 11(3), 791; https://doi.org/10.3390/su11030791 - 02 Feb 2019

Cited by 18 | Viewed by 3857

Abstract

Willard Cochrane was the first to introduce the notion that farmers are on a market treadmill, which, in spite of their constant efforts to improve productivity, wears away any profits that might result. Therefore, the essence of the treadmill is that agricultural income [...] Read more.

Willard Cochrane was the first to introduce the notion that farmers are on a market treadmill, which, in spite of their constant efforts to improve productivity, wears away any profits that might result. Therefore, the essence of the treadmill is that agricultural income does not grow in line with the increase in productivity. Although reasons of this phenomenon are economic in nature, it has caused a serious social problem, i.e., the relative deprivation of farmers’ income. Solving this problem is crucial for ensuring sustainable farming in its social dimension. The aim of the article was, firstly, to answer the question to what extent the concept of the market treadmill in agriculture is still valid for European countries; and secondly, to develop a sectoral model of agricultural income that would test whether the Common Agricultural Policy (CAP) has been successfully struggling with the Cochrane’s treadmill. The authors carried out panel research in a group of 25 countries over the years 1980–2015 in various subperiods. The main conclusion was that the traditionally understood market treadmill has lost significance in Europe, which might be advocated as a long-term value-added aspect of the Common Agricultural Policy (CAP). Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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14 pages, 593 KiB

Open AccessArticle

Social Security and Sustainable Economic Growth: Based on the Perspective of Human Capital

by Ming Zhang, Xiaorong Zou and Long Sha

Sustainability 2019, 11(3), 662; https://doi.org/10.3390/su11030662 - 28 Jan 2019

Cited by 24 | Viewed by 4904

Abstract

China’s social security expenditure has rapidly grown during the past decade, and concerns about the impact of social security on productivity and sustained economic growth have attracted attention. Based on Chinese provincial panel data over the period 2007–2016, a threshold model analysis found [...] Read more.

China’s social security expenditure has rapidly grown during the past decade, and concerns about the impact of social security on productivity and sustained economic growth have attracted attention. Based on Chinese provincial panel data over the period 2007–2016, a threshold model analysis found that the impact of social security on productivity has a “double threshold” on human capital. Using dynamic panel data models and system General Moment Method estimators also found the existence of this threshold effect: When the human capital level is low or high, social security is favorable for sustained economic growth. However, if the human capital level is at the intermediate level, the function of social security is weak. The main conclusions were still valid after we examined the robustness of our results with several methods. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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12 pages, 454 KiB

Open AccessArticle

What Makes Pension Reforms Sustainable?

by Aaron George Grech

Sustainability 2018, 10(8), 2891; https://doi.org/10.3390/su10082891 - 15 Aug 2018

Cited by 20 | Viewed by 5947

Abstract

Policymakers pushing pension reforms have tended to justify changes on the basis that they would make systems more sustainable by lowering future spending on pensions. This is a rather narrow interpretation of sustainability that fails to consider that other fiscal programs may need [...] Read more.

Policymakers pushing pension reforms have tended to justify changes on the basis that they would make systems more sustainable by lowering future spending on pensions. This is a rather narrow interpretation of sustainability that fails to consider that other fiscal programs may need to accommodate the impact of reforms that reduce pension system adequacy. In this light, this article argues that in order to correctly assess the sustainability of pension reforms, one needs to adopt a more holistic framework that encapsulates the interaction between pension system goals and constraints. In a number of countries, reforms focused solely on reducing future spending were followed by reforms that restored generosity. A holistic approach to assess pension sustainability could help limit this cycle of reform and increase trust in pension systems. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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36 pages, 695 KiB

Open AccessArticle

Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits

by Carlos Vidal-Meliá, Manuel Ventura-Marco and Juan Manuel Pérez-Salamero González

Sustainability 2018, 10(8), 2832; https://doi.org/10.3390/su10082832 - 09 Aug 2018

Cited by 10 | Viewed by 3885

Abstract

This paper develops a social insurance accounting model for a notional defined contribution (NDC) scheme combining retirement and long-term care (LTC) contingencies. The procedure relies on standard double-entry bookkeeping and enables us to compile a “Swedish” type actuarial balance sheet (ABS) following a [...] Read more.

This paper develops a social insurance accounting model for a notional defined contribution (NDC) scheme combining retirement and long-term care (LTC) contingencies. The procedure relies on standard double-entry bookkeeping and enables us to compile a “Swedish” type actuarial balance sheet (ABS) following a framework equivalent to an open group approach. This methodology is suitable for reporting the system’s solvency status and can show periodical changes in the system’s financial position by means of an income statement. The information underpinning the actuarial valuation is based on events and transactions that are verifiable at the valuation date, without considering expected future trends. The paper also contains an illustrative example to make it easier for policymakers to understand the main advantages and difficulties of our proposal. The policy conclusions stress the need to properly report social insurance benefits to enhance transparency and sustainability and to improve decision-making because it is in the public interest to do so. Full article

(This article belongs to the Special Issue Sustainability and Social Policy)

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