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What can China Expect from an Increase of the Mandatory Retirement Age?

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  • Peter J. Stauvermann

    (Changwon National University, School of Global Business & Economics)

  • Jin Hu

    (Changwon National University, School of Global Business & Economics)

Abstract

Because of an aging population, China is expected to raise the mandatory retirement age in order to mitigate the pressure on its pension system. Using an Overlapping Generations model we analyze the economic impacts resulting from an increase of the life expectancy and an increased retirement age on the pension system. The results show that it is ambiguous if an increasing retirement age will cause an increase or decrease of the pension benefits. We show that, the higher the share of capital income, the more probable it becomes that an increase of retirement age will exacerbate China's pension problems.

Suggested Citation

  • Peter J. Stauvermann & Jin Hu, 2018. "What can China Expect from an Increase of the Mandatory Retirement Age?," Annals of Economics and Finance, Society for AEF, vol. 19(1), pages 229-246, May.
    • Handle: RePEc:cuf:journl:y:2018:v:19:i:1:stauvermann:hu
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    Cited by:

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    2. Tai Lee & Joonmo Cho, 2022. "Unintended consequences of the retirement‐age extension in South Korea," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(1), pages 105-125, May.
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    5. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.

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    More about this item

    Keywords

    China; OLG model; PAYG pension system; Fertility; Mandatory retirement age;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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