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Labor Market Implications of Pension Reform: Analyzing Delayed Retirement Policies and Fiscal Adjustments in Aging Economies

Author

Listed:
  • Tiantian Dai

    (China Economics and Management Academy, Central University of Finance and Economics)

  • Hua Fan

    (Center for Industrial and Business Organization and Institute for Advanced Economic Research, Dongbei University of Finance and Economics)

  • Shenyi Jiang

    (China Economics and Management Academy, Central University of Finance and Economics)

Abstract

This paper employs a labor search model with two different skill-intensive markets to examine how pension systems and fiscal policies influence the young and the old unemployment rates in an aging population. In general, adjust- ments to the meeting rates, statutory contribution rates, and fiscal policies exert ambiguous effects on the labor market, and spillover effects arise as firms cannot discriminate based on age when hiring. The paper calibrates the model using Chinese data to quantify the impact of retirement policy reforms during the first decade of the 21st century, and it highlights each influencing channel using the counterfactual experiments.

Suggested Citation

  • Tiantian Dai & Hua Fan & Shenyi Jiang, 2025. "Labor Market Implications of Pension Reform: Analyzing Delayed Retirement Policies and Fiscal Adjustments in Aging Economies," Annals of Economics and Finance, Society for AEF, vol. 26(1), pages 247-280, May.
    • Handle: RePEc:cuf:journl:y:2025:v:26:i:1:daifanjiang
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    More about this item

    Keywords

    Aging; Pension reform; Unemployment rates; Labor search;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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