Raising the statutory retirement age: Win-win reform to respond to population aging in China

Editor's note: Zhang Benbo, a special commentator for CGTN, is a research fellow at the Chinese Academy of Macroeconomic Research. The article reflects the author's opinions and not necessarily those of CGTN.

On September 13, the Standing Committee of the 14th National People's Congress discussed and passed a proposal on raising the statutory retirement age in China. The country's current statutory retirement age is 60 for men, 55 for women cadres and 50 for women blue-collar workers. This standard was set in 1951 and has remained unchanged till now. However, it has been discussed widely in recent years whether the retirement age should be adjusted since tremendous changes have taken place in China. The proposal on raising the statutory retirement age is a reform measure taken by the Chinese government to actively respond to population aging, and it showcases the efforts to promote win-win outcomes facing the country's new situation of economic and social development.

Raising the statutory retirement age is in line with increasing life expectancy in China. The rapid improvement of health levels is an important feature of China's social progress. In 1951, the life expectancy of the Chinese population was less than 45 years old, but it was over 78 years old in 2023, about two years higher than the average of upper-middle-income countries. The healthy life expectancy is also close to 70 years old in China, which means many workers who have reached retirement age still possess strong working abilities. By raising the statutory retirement age, it is expected to meet the needs of capable and willing workers to extend their careers, as well as meet the demands of more employers and enterprises for experienced and skilled labor.

Raising the statutory retirement age is in line with the rapid improvement in educational levels in China. The average years of schooling for the population aged 15 and above rose from 5.3 years in 1982 to 9.9 years in 2020. At present, the gross enrollment rate of higher education in China exceeds 60 percent, and about half of the newly added labor force has received higher education, which means the age at which workers start working continues to have been pushed back accordingly. By raising the statutory retirement age, it is expected to provide well educated workers with more time and opportunities to apply what they have learned and realize their personal value. At the same time, it can also help to effectively utilize human resources and transition China's demographic dividend to a talent dividend.

Raising the statutory retirement age is in line with China's new challenge to actively respond to population aging. Population aging is a global trend, and China is also facing the same challenge. In 2023, the proportion of the population aged 60 and above in China was about 21 percent, and it is expected to exceed 30 percent by 2035. At the same time, the proportion of the population aged 16-59 is expected to decrease from 61 percent in 2023 to around 57 percent in 2035. Raising retirement age is a common response measure adopted by aging countries in the world. The actual average retirement age in countries in the Organisation for Economic Co-operation and Development in 2019 was approximately 65.4 for men and 63.7 for women; the average retirement age in EU countries in 2023 is around 64.3 years for men and 63.5 years for women. By raising the statutory retirement age, it is expected to further expand the supply of the labor force, alleviate the pressure of population aging on social security, and further increase the income of workers and improve their quality of life before and after retirement as well.

Retirement age adjustment is a systemic reform that involves multiple stakeholders, so it is essential to maximize the benefits for all parties involved by implementing supportive measures. One is to adhere to the principle of voluntary participation with appropriate flexibility, provide workers with more choices, and meet the diversified needs of different groups. The second is to actively develop the silver economy to create more job opportunities suitable for the elderly, and strengthen skills training for elderly workers and improve their employment ability. The third is to further improve China's social security system, establish incentive mechanisms for continuing work and continuous pension payment, and enable workers to obtain more benefits from delayed retirement.

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