Effect of China's Pension System on Wealth Distribution of the Elderly

Using the 2008 CHARLS household survey data, based on the actuarial evaluation approach, this paper analyzes the effect of China's old age pension system on the wealth distribution of the elderly. We find that the pension system reduces greatly the wealth distribution for the people who have pensions because of the high pension level. However, the pension wealth does not obviously change the wealth inequality for the whole people; the main reason is that the coverage of old-age insurance system is very limited.