Pension fairness in China

- We explore the fragmented structure of China's complex pension system.
- We discuss the evaluative dimensions and methodology of pension fairness.
- We present the data and evaluate pension fairness in China.
- We discuss explanations of pension (un-)fairness in China.
- We draw policy lessons from our analysis.

The most populous country in the world, China faces immense socio-economic challenges providing adequate pensions to its growing elderly population. In that country, pensions available to older people vary considerably across the country's various pension schemes. This paper calculates the fairness coefficients of these pensions based on pension income, contributions, demand, and generational gap. The analysis shows that the pension fairness coefficients are 0.53, 0.38, 0.95, and 0.82, respectively. Synthesizing pension income, contributions, demand, and generational gap, the paper suggests that, in China, old-age pensions across different schemes are absolutely unfair. Finally, it analyzes the superficial and deeper factors behind pension unfairness in China before providing policy recommendations for improving the fairness of the country's pension system.