Date of Completion

8-30-2019

Embargo Period

8-31-2029

Keywords

China, Social Security, OLG model.

Major Advisor

Kai Zhao

Associate Advisor

Francis Ahking

Associate Advisor

Hyun Lee

Associate Advisor

Stephen Ross

Field of Study

Economics

Degree

Doctor of Philosophy

Open Access

Campus Access

Abstract

This dissertation research contributes to the areas of Macroeconomics and Public Finance. In the first essay, I measure the earning profiles of the male and female workers in China. I find the earning profile of the low educated workers has become flatter; while the earning profile of the high educated workers has become steeper. The gender earning gap has decreased among the high educated workers, but increased among the low educated workers. Furthermore, I find there is a negative relationship between the initial wage and wage growth rate. In addition, I find the people who dropped out of the labor force after 1997 economic reform are relatively low skilled with flatter earning profiles. At last, the change of the gender wage gap is more gradual than sudden. In the second essay, we quantitatively evaluate the welfare consequence of China's gender-specific mandatory retirement policy using a calibrated Overlapping-Generation model with heterogeneous agents and incomplete markets. We find that the early mandatory retirement reduces welfare for women. An important reason behind this welfare result is that China's public pension benefits are only partially indexed to growth, and therefore women who retire earlier also benefit less from economic growth than men. Our quantitative results suggest that equalizing the retirement age across gender can generate a welfare gain for both men and women. In my third essay, I study the impact of the skewed gender ratio on the Chinese economy. I build an overlapping generation model with idiosyncratic labor productivity and incomplete market. I calibrate the benchmark model into the Chinese economy in 2010. I compare this benchmark economy to a counter-factual economy where the generations with the skewed gender ratio replace the whole population. I find the counter-factual economy is more productive and welfare improving. Moreover, as the population growth rate continues to fall, the social security program has to either increase tax by 2% or reduce the retirement benefits by 5%. At last, in the short-run, the effect of the skewed gender ratio is greater. However, when the generation with the skewed gender ratio retires, it exerts a negative impact on the economy.

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