JING Peng;ZHENG Wei
Insurance School of Southwest University of Finance and Economics;School of Economics, Beijing University
The transference of state-owned capital to pension fund affects the labor supply through “occupying public revenue” and “relaxing individual budget constraints.” This paper constructs an overlapping generation (OLG) model containing the transference of state-owned capital, endogenous fertility rate and education input to examine the long-term impact of the transference on labor supply. The results show that, compared with non-transference, the transference will reduce the quantity and improve the quality of labor, but the impact on the total labor supply is uncertain, which depends not only on the relative importance parents attach to the quantity and quality of their children, but also on the choice of pension policy tools after the transference, that is, to reduce the pension insurance premium rate or to improve the pension replacement rate. If we choose to reduce the pension insurance premium rate, when parents pay more attention to the quality of their children, the relationship between the total labor supply after the transference and the transference rate presents an inverted U-shaped pattern; when parents pay more attention to the quantity of children, there is a positive relationship between them. If we choose to increase the pension insurance premium rate, the relationship of the total labor supply and the transference rate will change inversely regardless of the relative importance parents attach to the quantity and quality of their children. From the perspective of promoting labor supply, if the transference is accompanied by a reduction in the pension insurance premium rate and if parents are guided to pay equal attention to the quantity and quality of their children, it is likely to witness the benign interaction between the endowment insurance system and the labor market.
state-owned capital;endowment insurance;transference rate;labor supply