New trends in the labor market and improve the pension insurance system

Abstract: Since the 20th century, since the late 90s, with the economic reform and social development and change, China's labor market labor participation rate, flexible forms of employment increasingly common phenomenon, and an aging Population increasingly apparent, the future may reduce labor supply, labor market trends will give these new challenges to old-age insurance system, this article will be analyzed, and on this basis, the improvement of the pension insurance system proposed in this paper.

Keywords:: labor force participation rate, flexible employment, Population aging, pension insurance
Abstract: Since the late nineties of the twentiethcentury, accompanying the rapid Population ageing, China's labor force participation rate has been in atrend of declining, and flexible employment in a trendof booming.These new trends of China labor market havebeen posing challenges to the old- age insurance sys-tem.The old-age insurance system should be adjustedand improved according to these new trends of China la-bor market.

Keywords: labor market; labor force participation; flexible employment; old-age insurance
First, labor market trends 1. Labor force participation rate decreased labor force participation rate and employment rate is reflected in the Population structure in a certain utilization of labor resources, the two indicators, labor force participation rate and employment rate remained at a high level above the means of labor resources were better use. labor force participation rate of economically active Population accounts for the proportion of working-age Population, which refers to the economically active Population is the ability to work and to participate in or to participate in economic activities of the Population, including the employed Population and unemployed Population, while the working-age population refers to people aged 15 to 64. Up to now the national statistical departments have not yet been published specifically on the labor participation rate data, so this data needs to be calculated. I According to <"China Statistical Yearbook>> of the data from 1998 China's labor force participation rate in 2006 was calculated results show that labor force participation rate in 1998, 84.65%, a slight decline in 1999, was 84.57 percent, dropped to 83.23 percent in 2000, despite the labor force participation rate in 2001 rose to 83.73% , but then in 2002 to 2004 labor force participation rate continued to decline, labor force participation rate was 81 in 2004.

93% of the labor force participation rate in 2005 rose to 83.44 percent in 2006, dropped to 82.29%.

Overall, the labor participation rate showed a downward trend.

Resulting decline in labor force participation rate of 3 main reasons: First, the average years of Education mentioned the population led to decline in labor force participation rate of young people, and second, the phenomenon of early retirement in the elderly population, labor force participation rate has dropped and the third is the re-employment difficulties, part of the unemployed led to loss of confidence and motivation to find work, become "discouraged workers" and leave the labor market, the labor participation rate.

2. Become increasingly popular flexible employment

In recent years, with the economic reform and adjustment of industrial structure, employment structure is changing, in the organs and institutions and enterprises with certain scale in a declining share of formal employment process, in sharp In contrast, increasing year by year the number of flexible employment, flexible employment to absorb labor force has increasingly become an important form. The so-called flexible employment, that is, formal or informal units in the unit is different from regular employment forms of employment. such employment in the labor time, income remuneration and other terms of the workplace more flexible, in the insurance benefits, labor relations, and often do not have certain legal protection. flexible employment of laid-off workers from state-owned enterprises not only, transfer of surplus labor in rural areas, including intellectuals and university graduates Health and other cities in the economically active population of some new staff, including many laid-off workers employed in private enterprises, individual business units of non-formal or formal positions in the temporary, seasonal work, the transfer of rural surplus labor and more engaged in the construction , catering services, security cleaning, domestic services, etc., while the intelligentsia and university graduates and other new economic activities in urban parts of the population who are mostly freelancers. flexible employment range covering almost the national economy and social life in various fields. According to the Ministry of Labour and Social Security Research Group a study in 2003, a total of about 47 million flexible employment, accounting for 18% of the total urban employment. According to a similar study of CASS, in 2003 accounted for flexible employment proportion of about 17.5% of employment.

3. Aging of the population will decrease future labor supply in 1956, the United Nations proposed the type of population age criteria for the classification, which divided the country on the old type is: a country of 65 years and over 7% share of the elderly population, this standard of China in 2000 as aging-oriented country. China's aging population will continue to accelerate the pace is expected to usher in the 21st century will be the peak of population aging, the elderly population in the process of absolute and relative amount of both increased rapidly after the mid 21st century, population aging speed will slow down. population aging to the economic and social development impact will be profound in terms of the total population, with the long-term birth and fertility rates continued to fall, much less the inertia of population growth is expected in the 21st century the total population of 20 years to peak, after which the total population will be gradually reduced, in terms of labor supply is expected to begin from 21 century, 30 years, labor in the proportion of the total population will begin to decline. Some scholars have estimated the proportion of labor in the total population the next 20 years will be more than 60%, slightly higher than the end of this century and gradually declined to 50% level. abundant cheap labor in China has been a major advantage in international competition, while the population aging of the labor supply reduction, will China's economic growth and adversely affect the pension system.

Second, the challenges facing the pension system

New trends in the labor market in China will challenge old-age insurance system, mainly the decline in labor force participation rate and an aging population will add to the burden of pension insurance, employment insurance and flexible hard to two aspects: 1. The decline in labor force participation rate and population aging will increase the burden of pension insurance decreased labor force participation rate and an aging population means that recipients of pension payments to retired workers pension fund payment with respect to the ratio of service workers is higher, thus pension funds have a direct impact. According to China's existing urban basic old-age insurance system, pension insurance funds from the social pool and personal accounts of two parts, part of the social pooling contributions for basic pension calculated and paid, reflecting the social re- distribution of contributions to personal accounts of some of my personal account for employee pension calculated and paid, reflecting the efficiency. the social pooling part of the financial balance of the equilibrium condition is: wage replacement payment rate = rate �� maintenance rate, where payment Pension payment rate the amount of active employees and the ratio of total wages, wage replacement rate of the average pension for retired workers and service workers the average wage ratio, the maintenance rate of the number of retired workers and the ratio of active employees. This equation shows that , to maintain the wage replacement rate remains unchanged, the higher the dependency ratio, the higher contribution rate. But enterprise and employees, the capacity of the contribution rate there is a limit, when the contribution rate reaches the cap rate , the support means to further improve the rate of wage replacement rate of pension to be adjusted downward. However, there are downward rigid pension, easy up easy down, the result is to make the pension system is facing a financial crisis.

2. Flexible Employment insurance is difficult

Flexible employment is characterized by strong liquidity, and the existing pension system is based on the characteristics of informal employment, design and operation, and which job stability and continuity of payment is based. Set in the pension insurance agency based on labor units as the center, mainly for the implementation of insured employment units registration, reporting and fee collection, lack of specialized personnel for flexible employment information management system, pension insurance agency difficult to grasp the operating status of such employer number of employees, and income and other basic information.

Obviously, the existing pension system can not match the characteristics of flexible employment. Although in recent years to facilitate flexible employment pension insurance, and some provincial and municipal social insurance institutions to establish a personal payment window, to a certain extent, to facilitate a flexible employment insurance for routine matters, but because of such employment pension insurance based personal self-management, lack of necessary restraint mechanism, pension insurance agency for such employment in the management of the insured limit by the functions , coercive power is limited, so insurance instability.

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Third, the Pension Insurance System

New trends in the labor market in China to bring a new pension system, the Government needs to improve the pension system itself to start, expand pension coverage for the improvement of flexible employment pension insurance system to address the decline in labor force participation rate and population aging of the impact to the pension insurance, as well as the difficult problem of flexible employment insurance.

1. Expand the coverage of pension insurance

The face of the labor participation rate and the aging population on the challenges of old-age insurance, we should focus on the current working-age population as much as possible to participate in social pension insurance. At present China's social pension insurance is divided into two sections of towns and rural areas, urban social Pension coverage for the employed population in cities, coverage is not high on the whole, the employer pension insurance evasion, deliberate concealment or omission of the total number of employees and wages still exists. rural social endowment insurance construction is far behind in the city, basically to family-based, raising rural land into
The old main economic security.

Endowment insurance for extended surface, first of all, the need for old-age insurance system in the historical event of default transition clear responsibility and reasonable payment rates estimated to increase participation in employer pension insurance and employment initiative, and secondly, should be as soon as possible <"Social Insurance Law">, and increase the implementation of the mandatory pension insurance, the insurance unit of escaping punishment should increase as soon as possible to improve old-age insurance in the individual, private enterprises and the informal sector coverage to more number of workers to participate in the pension system in the past. on the rural social endowment insurance, the system should be built to speed up the pace, and increase government financial investment, according to three regions with different levels of economic development and the development of the payment differences payment standard, the rural population into the public pension system in the past.

2. Flexible employment improved for the first pension insurance system, pension system should consider the implementation of the development of flexible standards. Informal employment pension insurance system is a unit of the main sources of funding and joint contributions of individual workers, this model should be based on the characteristics of flexible employment innovation, especially in the contribution base, contribution rate and the payment method on innovation: the contribution base, you can consider the pension contribution base is set to not less than the minimum wage of local workers to reduce the flexibility the burden of employment, the proportion of the payment, for the high rate of informal employment, high pay pension premiums, a flexible employment pension insurance barriers to employment should be allowed flexibility to lower rates to participate in pension insurance, in the forms of payment, it can be considered for flexible employees set annual payment amount and press on the balance sheet, as long as payment at any time within one year to the amount to be deemed the regular payment, to provide more flexible and convenient Payment.

Second, improve the pension insurance management information technology to improve the convenience of transferring pension degrees. Is a permanent flexible employment to establish a personal pension accounts, according to their employment through flexible payment, total payment calculation period. It is worth mentioning that January 1, 2010 implementation of the <<Urban Enterprise Employees, continue transferring pension Interim Measures>> cross-regional flows of workers transferring pension follow the relevant provisions were made, which greatly protect the trans-regional mobility of workers pension rights. However, flexible employment transferring pension staff problems still continue to be addressed more detailed operating procedures and norms. Meanwhile, pension insurance information service should speed up the pace of network building, and gradually realize the national old-age insurance information computer networking, data sharing to facilitate the management purposes and to provide convenient and flexible employment payment and inquiry services, improve the flexibility of the insured employment initiative. �� NOTE: This article is Department of Education, Wuhan municipal university Research projects in 2009 "Wuhan City, the construction sector wages of migrant workers crack problems" (item number: 160, part of the Research results.

References:

[1] Summers, Lawrence H. Demographic Differences inCyclical Employment Variation.In Understanding Unem-ployment.Lawrence H. Summers eds.Cambridge, Mas-sachusetts: the MIT Press ,1990:178-180. [2] National Bureau of Population and Statistics Division, Ministry of Labour and Social Security Planning and Finance. China Labor Statistical Yearbook 2005 [M]. Beijing: China Statistics Press, 2005. [3] Ministry of Labour and Social Security Research Group. Our analysis of flexible employment conditions [J]. Chinese Labor and Social Security, 2005, (02). [4] Cai Fang, Du Yang, Wang Meiyan. Chinese labor market in transition and development [M]. Beijing: Commercial Press, 2005. [5] Du Peng, Qu Zhen open, Chen Wei. China's development trend of a century of population aging [J]. Population Studies, 2005, (06).

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