National wealth and social security income redistribution

Author: Mu Huaizhong
Publisher:
Publish Date: 2003-01-01
Features: The continuous development of the economy and society has led to a sustained increase in the level of social security. This rise has, on one hand, improved people's quality of life, and on the other hand, gradually become one of the major challenges hindering the sound operation of the government's fiscal system. Based on empirical analysis and considering the conditions of economic and social development, the author proposes the hypothesis that the relative level of social security will follow a "inverted U-shaped curve" trajectory—first rising continuously and then moderately declining. He provides a detailed analysis of the five supporting arguments for this hypothesis (the gradual decline of the Engel coefficient, the gradual expansion of the middle class, the limited growth of the proportion of elderly populations, the gradual enhancement of individual self-protection capabilities, and the increase in per capita GDP) and the four stages (pre-social security stage, stage of fluctuating social security levels, stage of declining social security levels, and stage of stable social security levels).
Based on theoretical and empirical analysis, the author proposes the theory of the development curve of social security levels, explaining the mechanisms and processes of a virtuous cycle between the social security system and the government's public finance system. Through quantitative analysis of social security levels, the author examines economic issues in the operation of social security, including: the nature of the rigidity of social security expenditures and its distinction from wage rigidity; the differences and connections between the relative and absolute levels of social security; the dialectical relationship between the rational curve of social security levels and the actual curve; and the inherent economic interdependence among risk, security, and efficiency.
Building on the explanation of the "inverted U-shaped curve" hypothesis of social security levels, the book analyzes the causes and development patterns of the "inverted L-shaped curve" and the "parabola-shaped curve" in reality. A rational process of redistribution of social security revenue is a Pareto improvement process. Therefore, the author further elaborates on the intrinsic relationship between Pareto optimality conditions and income distribution, analyzing the optimization basis, criteria, structure, and functions of social security revenue redistribution. Additionally, he explains the optimization principles and conditions for individual vertical income redistribution, as well as the optimization principles and conditions for intergenerational horizontal income redistribution and horizontal income redistribution between the rich and the poor. The book summarizes and generalizes the theory of optimizing social security revenue redistribution and explores new strategies for optimizing this process in China.
Correct theory is the guide for correct policy. The publication of this book undoubtedly represents another innovation and advancement in China's social security theory. This will have a positive impact on guiding the redistribution policies of social security revenue during China's transition period, ensuring that the train of social security revenue redistribution policies moves onto the right track.