The Pension Scheme in Vietnam: Current Status and Challenges in an Aging Society

The publicly-managed Pay-As-You-Go (PAYG) defined-benefit pension scheme in Vietnam is described, with an analysis of its financial sustainability in the context of an aging society in a dynamically efficient economy. By using actuarial models developed by the International Labor Organization (ILO), the paper finds that the implicit pension debt (IPD) of the scheme is high in comparison with GDP of the year 2000, which is the base year for projections. Regarding the social aspect, a high IPD implies that the burden of maintaining this scheme is borne by the current and future participants. For this reason, the pension scheme in Vietnam will cause not only financial instability but also inter-generational inequity. In order to avoid this situation, the current scheme needs to be reformed. In particular, Vietnam should move to a partially-funded defined-contribution scheme with careful considerations of social and economic impacts so as to avoid both financial instability and inter-generational inequity.aging population; pension scheme; pension debt; financial sustainability; Vietnam

Pension Liabilities and Generational Relations: The Case of Vietnam

In the next fifty years, according to the United Nations Population Prospect (2004), an aging population is expected in Vietnam. The operation of a pay-as-you-go defined benefit pension scheme will inevitably elevate pension liabilities. These liabilities, in turn, threaten the financial sustainability of the scheme, and affect generational relations. This paper estimates the size of pension liabilities of the current pension scheme in Vietnam, and analyzes generational relations under various economic scenarios. Pension liabilities are considered by a closed-group approach. The estimated results show that pension liabilities account for a small part of 2002 GDP, and this is partially explained by two primary factors: (i) the method of estimation currently employed by the scheme, and (ii) the fact that currently the scheme covers only a small portion of the total population and labour force. It is, however, obvious that the government will have to pay existing pension liabilities, which will affect generational relations in the longer term, particularly from an economic point of view. Whether the impacts on generational relations will be serious or not depends upon payment settings and reforms of the scheme.aging; inter (intra)generational relations; pension liabilities/debts; Vietnam

ベトナムにおける人口変化と高齢者の貧困と社会的保護の財政

公共政策プログラム / Public Policy Program政策研究大学院大学 / National Graduate Institute for Policy Studies論文審査委員: Wade Pfau（主査）, 大来 洋一, 大山 達雄, 国枝 繁樹（一橋大学大学院国際企業戦略研究科）, 坂本 純一（野村総研

Gender and Remittances in Vietnam

Since the 1990s, Vietnam has experienced a dramatic growth in remittance flows. This paper uses the Vietnam Living Standard Surveys for 1992/93 and 1997/98 to study the role of gender in these remittance flows, both from the perspective of receiving and sending remittances. Knowing about gender differences will help to better explain the impact of remittances and to understand the nature of gender roles during a time of economic transformation. We find important distinctions, such as a responsibility among women for the intergenerational transfers of remittances (particularly between parents and children) while men tend to take more responsibility for intragenerational remittances. As well, after controlling for other factors and sharing remittances between spouses who live together, we find evidence that women have a higher likelihood to both send and receive remittances.

Determinants of Elderly Poverty in Vietnam

By using household data in 2004, this paper identifies the determinants of the elderly poverty in Vietnam. We find that urban and rural elderly are substantially different, and thus they should be analyzed separately. The results for urban areas generally show that higher ages, unmarried status, residential regions, and working status have significant impacts on the likelihood of poverty for the elderly. In rural areas, higher ages, female, unmarried status, ethnic minorities, residential regions, household composition, and household size are determinant factors of the likelihood of poverty for the elderly. We also found some factors which are less important for both areas, including characteristics of household heads. Remittances and social security benefits appear to be important for reducing poverty of the elderly households, particularly in the rural areas. Based on findings, we formulate policy priorities, including reducing regional disparities, promoting the rural economy, and reforming the social security system.elderly, poverty, Vietnam

Patterns and Determinants of Living Arrangements for the Elderly in Vietnam

By using the Vietnam Living Standard Surveys in 1992/93 and 1997/98, and the Vietnam Household Living Standard Surveys in 2002 and 2004, this paper describes the patterns of living arrangements for the elderly in Vietnam and examines the determinants of such arrangements during the past decade. We apply multinomial analysis techniques for these research purposes. The estimated results show that family structures in Vietnam have generally been maintained despite profound social and economic changes since Doi moi, as the proportion of elderly who were living with their children was high. The findings also indicate that the elderly’s decisions about whom to live with depended on various factors, including age, gender, marital status, urbanity, and home ownership. Nevertheless, some undesirable trends are emerging, such as a decline of elderly dependent on others, and a rise in elderly living alone.Vietnam; elderly; living arrangements

The Growing Role of International Remittances in the Vietnamese Economy: Evidence from the Vietnam (Household) Living Standard Surveys

Our findings include that overseas remittances come from throughout the world, but are dominated by the United States as a main source. Also, over time, the destinations of foreign remittances are becoming more diverse as they move away from Ho Chi Minh city and other urban areas, in particular, to other regions and to rural areas. Nonetheless, the percentage of households receiving overseas remittances as held steady at around 5 to 7 percent of the population. Also, widows, the elderly, female headed households, and households where the head does not work disproportionately receive foreign remittances. This helps to ensure that foreign remittances actually improve equality in Vietnam with regard to per-capita household expenditures, though the improvements are quite small. Nonetheless, the improvements to income equality caused by overseas remittances are becoming more substantial over time. We also determine that overseas remittances are used primarily for consumption, and they are mainly provided by close family members including children, spouses, and siblings.Vietnam, remittances, household surveys

An Exploration for a Universal Non-contributory Pension Scheme in Vietnam

Briefly, some of our findings are as follows. First, the impacts of a universal NCP scheme on poverty rates and the poverty gap of the older persons would be significant, but become less potent when the eligibility age is higher. In particular, with the benefits provided, the older persons who are females; who are married; who are living in urban areas; who are working, or who are receiving social insurance benefits would be more likely to reduce their poverty rates and poverty gaps than other elderly groups. Second, the financial simulations show that the cost of the scheme, which provides a benefit equal to 50.0 per cent of the official poverty line to all the persons aged 60 and over, would be about 1.2 per cent of GDP in 2004. As population ages as in the projections of the United Nations (2007a), the cost would be higher, but only as high as about 3.0 per cent of GDP.Vietnam, non-contributory pension

The Elderly Population in Vietnam during Economic Transformation: An Overview

Many studies have suggested that, under the context of high economic growth and strong flows of laborers from rural to urban areas, living arrangements of the elderly people, particularly elderly women, and familial relations will be more vulnerable to a variety of social and economic risks. This paper, using the Vietnam (Household) Living Standard Surveys from 1993 to 2004, will examine the issue by decomposing the elderly population in Vietnam in association with various aspects of aging. With an investigation of numerous variables such as education, household living arrangements, and housing conditions, it is found that familial relations have been maintained strongly in Vietnam, although social and economic contexts have changed rapidly since Doi moi. We find a relatively high proportion of elderly people living with their children, particularly married sons. In addition, they are not simply dependents in the households; conversely, they are still contributing to the households in various ways. The detailed decomposition of data on the elderly people, however, shows that women have certain disadvantages in comparison with men due to lower education, higher levels of widowhood and living alone. There is also a big disparity gap between elderly people living in urban and rural areas, and between regions in term of poverty. Another striking finding is that, during the past decade, poverty rates of the elderly people were actually lower than that of nonelderly people, and the highest poverty rates occurred with very young or very old people. This situation indicates a necessity for promoting social welfare policies from the government.elderly population; gender; household living standard survey; Vietnam

Demographic Changes and Pension Finances in Vietnam

This paper aims to provide a long-term financial vision for the Vietnamese pension scheme using stochastic modeling for key variables under an actuarial framework. In particular, we project the pension fund balances in order to see whether the scheme will be financially sustainable. The median values of the status-quo projections show that the pension fund will be depleted in about 2052 with a 90-percent confidence interval range of 8 years. The estimated results from our sensitivity tests show that the retirement age, the indexation method for pension benefits, and the contribution rate are all crucial determinants of the pension fund balance in the long term. At the same time, some factors, including coverage rates, administrative costs, the long-term fertility rate, and the rate of return on pension fund assets play less important roles in determining the fund’s balance.aging, stochastic projections, pension finances, Vietnam