nep-cna New Economics Papers
on China
Issue of 2009‒03‒07
two papers chosen by
Zheng Fang
Ohio State University

  1. The Health Penalty of China's Rapid Urbanization By E. Van de Poel; O. O'Donnell; E. Van Doorslaer
  2. The Latin American experience in pension system reform: Coverage, fiscal issues and possible implications for China By Titelman, Daniel; Vera , Cecilia; Perez Caldentey, Esteban

  1. By: E. Van de Poel (Erasmus School of Economics, Erasmus University Rotterdam); O. O'Donnell (University of Macedonia, Thessaloniki, Greece); E. Van Doorslaer (Erasmus School of Economics, Erasmus University Rotterdam)
    Abstract: Rapid urbanization could have positive and negative health effects, such that the net impact on population health is not obvious. It is, however, highly pertinent to the human welfare consequences of development. This paper uses community and individual level longitudinal data from the China Health and Nutrition Survey to estimate the net health impact of China’s unprecedented urbanization. We construct an index of urbanicity from a broad set of community characteristics and define urbanization in terms of movements across the distribution of this index. We use difference-in-differences estimators to identify the treatment effect of urbanization on the self-assessed health of individuals. The results reveal important, and robust, negative causal effects of urbanization on health. Urbanization increases the probability of reporting fair or poor health by 5 to 15 percentage points, with a greater degree of urbanization having larger health effects. While people in more urbanized areas are, on average, in better health than their rural counterparts, the process of urbanization is damaging to health. Our measure of self-assessed health is highly correlated with subsequent mortality and the causal harmful effect of urbanization on health is confirmed using more objective (but also more specific) health indicators, such as physical impairments, disease symptoms and hypertension.
    Keywords: urbanization; health; China; treatment effects; difference-in-differences
    JEL: I12 I18 O18
    Date: 2009–02–19
  2. By: Titelman, Daniel; Vera , Cecilia; Perez Caldentey, Esteban
    Abstract: In the past two decades, Latin American countries reformed their pension systems focusing mainly on addressing the weaknesses of the contributory schemes - fiscal unsustainability, low coverage levels and a high degree of segmentation- and barely addressed the non-contributory element. The reform experiences show however that the intended reforms did not manage to meet their objectives. Firstly, to this day, a large proportion of the population remains inadequately covered by the contributory system. Secondly, the fiscal performance and outcome of the reform was worse than originally planned. The possibilities for the success of these reforms faced several constraints of a structural nature that are independent of the pension system itself and that as a result can not be overcome by a pension reform including mainly the limited savings capacity of some population groups and the instability and precariousness of the labor markets in the region. The Latin American experience shares similarities with that of China in terms of coverage, labor market informality. Both cases attest to the importance of combining contributory and non-contributory components in pension reform design.
    Keywords: Pension reform; contributory schemes; coverage; Fiscal unsustainability; Contributory coverage; contribution density; fragmentation; transition costs; pension reform in Latin America; pension reform in China
    JEL: G23
    Date: 2008–11

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