Education
Tuition for growing up
Pays for
- Pre-school (first two years)
- Academic high school
- University
- Adult vocational training
Not compulsory schooling, not living costs.
Personal 50% · Shared 50%
A county-level social experiment, studied on paper
Education, health, life — one shared pool
The residents of a county pay into one fund for education, medical care and pensions, by income, and draw from it when they need to. After a single government seed injection, can it run for decades without outside money?
A research project: it raises no money and accepts no contributions.
Three funds
Each fund has personal accounts and a shared pool. A personal account records what the member owns; the shared pool spreads the risk.
Medical
The part public insurance leaves
Pays for
- Out-of-pocket costs after public medical insurance
- 60% of the amount above a 1,000-yuan deductible
- Up to 50,000 yuan per claim, 100,000 yuan a year
It does not replace the existing resident medical insurance.
Personal 30% · Shared 70%
Life
Living long, without the risk
Pays for
- A monthly pension from age 60, target 200 yuan
- The shared pool keeps paying once the personal account runs out
- A shared top-up after 15 years of contributions
Pensions depend only on the member's own contributions.
Personal 80% · Shared 20%
How it works
Members with an income pay into all three funds every month, whether they need them now or not. Family members without an income benefit too.
- 1
Seed
The government injects start-up capital once. No top-ups and no subsidies follow.
- 2
Growth
Residents join voluntarily and pick one of 8 contribution tiers by income. In the study county the tiers run from 530 to 6,400 yuan a year.
- 3
Maturity
Policy makes membership mandatory. Every legal resident is a beneficiary from birth and starts paying once they earn.
Three key rules
Pooled lending
When one shared pool runs short it may borrow from the other two. Every loan is booked, bears interest and is repaid — never simply taken.
Transfer at death
When a member dies, the personal balances move to the shared pools and pay the pensions of members who live longer.
Run protection
When solvency falls below 100%, members who leave are paid out over 3 years, so a run cannot drain the fund.
Key findings
The study county is a mountain county in western China: 197,500 residents, strong youth out-migration, a weak budget. An individual-level simulation, calibrated on public data, runs 50 years. These are the v1 results.
- Ceiling of voluntary participation
- 13%Even after 50 years it stays below the 30% needed to switch to mandatory membership. To cover the county, policy has to set the date.
- Median solvency at year 50
- 1.8With the switch to mandatory membership in year 10, none of the 50 runs defaulted.
- Seed capital needed with pooling
- 0With the switch in year 10, separate pools need 35.2 million yuan; pooled lending needs none. The medical and pension pools built up in the voluntary years lend to the education pool.
- Average contribution, share of income
- 5.4%2,463 yuan per person a year on average, on top of existing resident medical and pension contributions — a real burden for low-income rural households.
| Separate pools | Pooled | |
|---|---|---|
| Mandatory from year 1 | 93.75 | 27.34 |
| Mandatory from year 10 | 35.16 | 0 |
Smallest injection that keeps the default probability at or below 5%. The gap sits in the year membership becomes mandatory, when every child in the county starts drawing education benefits. The largest value is about 11.8% of the county's own budget revenue.
What history taught us
We studied more than ten mutual-aid and social-security cases. These lessons went straight into the fund's rules.
Singapore CPF
Personal accounts have worked for 70 years — but the government pays for the interest floor, which this design cannot copy.
China's pooled + personal pensions
About 2.22 trillion yuan of empty personal accounts: lending between pools without booking or repaying is taking.
British Friendly Societies
As members lived longer, sickness pay turned into pensions. Long-term liabilities eat short-term pools.
Ant Group's Xianghubao
Once the cost share rose past a threshold, young healthy members left together — an adverse-selection spiral.
Rwanda's community health insurance
Coverage above 80% came from mandatory enrolment plus subsidy. Purely voluntary schemes rarely grow large.
China's rural credit cooperatives
The first risk of a county money pool is failed governance and misappropriation, not actuarial imbalance.
Limits and next steps
Limits of v1
- Liabilities count personal accounts and pensions in payment only, not future education and medical benefits, so solvency reads high.
- Medical costs do not grow faster than incomes in the model.
- Join and exit behaviour are assumptions, not local data.
- Each scenario ran only 50 times.
Next
- A stress test with medical costs growing 1–2% a year faster than incomes
- Future expected benefits counted as liabilities
- The same calibration for an ageing county in eastern China, as a control
- The legal feasibility analysis