Abstract
Employing an endogenous growth model, this paper investigates China’s partially funded public pension system. We examine the effects of the firm contribution rate and individual contribution rate on the per capita income growth rate, population growth rate, saving rate and education expense rate. The results are as follows: Raising the firm contribution rate decreases the per capita income growth rate and saving rate, whereas increases the population growth rate and education expense rate. Raising the individual contribution rate decreases the per capita income growth rate, saving rate and education expense rate, whereas increases the population growth rate. The effect of the firm contribution rate on the per capita income growth rate is much greater than that of the individual contribution rate. The effects of the firm contribution rate on the population growth rate, saving rate and education expense rate are smaller than that of the individual contribution rate. It has more advantages than disadvantages to reduce the firm contribution rate and raise the individual contribution rate.
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