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One Country, Two Systems: Evidence on Retirement Patterns in China

Author

Listed:
  • Giles, John T.

    (World Bank)

  • Lei, Xiaoyan

    (Peking University)

  • Wang, Gewei

    (Peking University)

  • Wang, Yafeng

    (Peking University)

  • Zhao, Yaohui

    (Peking University)

Abstract

This paper documents the patterns and correlates of retirement in China using a nationally representative survey, the China Health and Retirement Longitudinal Study (CHARLS). After documenting stark differences in retirement ages between urban and rural residents, the paper shows that China's urban residents retire earlier than workers in many OECD countries and that rural residents continue to work until advanced ages. Differences in access to generous pensions and economic resources explain much of the urban-rural difference in retirement rates. The paper suggests that reducing disincentives created by China's Urban Employee Pension system, improving health status, providing childcare and elder care support may all facilitate longer working lives. Given spouse preferences for joint retirement, creating incentives for women to retire later may facilitate longer working lives for both men and women.

Suggested Citation

  • Giles, John T. & Lei, Xiaoyan & Wang, Gewei & Wang, Yafeng & Zhao, Yaohui, 2021. "One Country, Two Systems: Evidence on Retirement Patterns in China," IZA Discussion Papers 14725, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp14725
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    Cited by:

    1. Daniel W. L. Lai & Yong-Xin Ruan & Julia Juan Wang & Emma H. S. Liu & Jia-Jia Zhou, 2023. "Experience of Chinese Recent Retirees on the Effects of Retirement on Healthy Ageing in Shenzhen and Hong Kong," IJERPH, MDPI, vol. 20(4), pages 1-13, February.
    2. Feng, Lyubing & He, Yuxi & Zhan, Peng, 2023. "Economic independence and living arrangements of older women with agricultural Hukou in China," China Economic Review, Elsevier, vol. 81(C).
    3. Cheng, Lingguo & Lu, Yunfeng, 2024. "Does retirement make people more risk averse?," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 135-155.
    4. Fu, Liping & Wang, Ruizhen & He, Chaoying, 2025. "Gender differences in later life: Labor supply responses to spousal disability," Social Science & Medicine, Elsevier, vol. 366(C).
    5. Gustafsson, Björn Anders & Zhang, Peng & Jia, Hanrui, 2023. "How and Why the Gender Pension Gap in Urban China Decreased between 1988 and 2018," IZA Discussion Papers 16558, IZA Network @ LISER.
    6. Cheng, Lingguo & Lu, Yunfeng, 2024. "Risk attitudes across the life course: Evidence from China," China Economic Review, Elsevier, vol. 88(C).
    7. Yao, Yuxin & Zhang, Yi, 2023. "The long-term and intergenerational effects of early-life hunger experience on human capital and labor market outcomes," China Economic Review, Elsevier, vol. 77(C).
    8. Gong, Jinquan & Wang, Gewei & Wang, Yafeng & Zhao, Yaohui, 2022. "Consumption and poverty of older Chinese: 2011–2020," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    9. World Bank, 2024. "China Economic Update, June 2024," World Bank Publications - Reports 41709, The World Bank Group.
    10. Tianshu Jiang & Hongli Fan & Qian Wei, 2024. "The Impact of Retirement on Subjective Well-Being: Evidence from Chinese Formal Sector Workers," Journal of Happiness Studies, Springer, vol. 25(7), pages 1-22, October.
    11. Li, Qin & Smith, James P. & Zhao, Yaohui, 2023. "Understanding the effects of widowhood on health in China: Mechanisms and heterogeneity," The Journal of the Economics of Ageing, Elsevier, vol. 25(C).
    12. Yang, Qianqian & Ye, Zihan & Chen, Rongda, 2024. "Working longer or working harder? Subjective survival expectations and labor supply in China," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 827-847.
    13. Wu, Jiawei & Marois, Guillaume, 2025. "Family-work history and inequalities in old-age cognition in China," Social Science & Medicine, Elsevier, vol. 381(C).
    14. World Bank, 2024. "Productive Longevity," World Bank Publications - Reports 42559, The World Bank Group.
    15. Zhan, Peng & Zhang, Anqi & Ma, Xinxin, 2023. "Public pension policy, substitution income, and poverty reduction: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1138-1154.
    16. Bao, Yong & Bond, Timothy N. & Sun, Ruiting & Xiong, Xueping, 2025. "Voluntary retirement savings in China: A spatial ordered probit approach," Regional Science and Urban Economics, Elsevier, vol. 111(C).

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    Keywords

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    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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