Employing an endogenous growth model, this paper investigates China's rural public pension system. We examine the effects of the policy variables on the labor income growth, population growth, etc. The positive effect of the basic benefit rate on the labor income growth rate is much larger than the total negative effects of the local government allowance rate, village subsidy rate and individual contribution rate. The negative effect of the basic benefit rate on the population growth rate is much larger than the total positive effects of the local government allowance rate, village subsidy rate and individual contribution rate. The effects of the policy variables on the consumption ratio are not negative. The positive effect of the basic benefit rate on the saving rate is smaller than the total negative effects of the local government allowance rate and village subsidy rate, and just about half of the negative effect of the individual contribution rate. The positive effect of the basic benefit rate on the education expense ratio is much larger than the total negative effects of the local government allowance rate, village subsidy rate and individual contribution rate. The negative effect of the basic benefit rate on the gift ratio is larger than the total positive effects of the local government allowance rate and village subsidy rate. It has more good than harm to raise the basic benefit rate, local government allowance rate and village subsidy rate, maintain the present individual contribution rate or raise it by a less margin.
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