Extending retiring age: yes or no
As a graduate majoring in labor economics, I have always been asked by one same question, “whether should we extend retiring age?” To give a decent answer to that, it is rational to collect as much comprehensive information as possible before we truly respond in depth.
Advocates of extending retiring age claim that most developed countries have adopted such policy and gained benefits. The main reason to prolong working years in those countries is to increase labor supply. Denmark, Norway and Iceland are three countries that set the longest retiring age---67. Besides, employees from the US enjoy a flexible retiring system, which aims at encouraging older retiring age. Japan is also implementing a plan, modifying current institutions to urge people to leave the labor market from 60 to 65 within next 20 years. Low birth ratio and decreasing population, the typical features of those countries, have caused insufficient labor supply which impedes economic growth. Therefore, extending retiring age succeeds in pulling labor back and making sustainable development.
Undoubtedly, we are facing similar aging problems that once happened in those developed countries. According to UN’s definition, an aging society is that people over 65 occupy more than 7 percent of the whole population. Statistics from the sixth national census shows that 8.9 percent of our population is over 65. Besides, old-age dependency ratio in China has reached to 20 percent, which means five workers need to support a retired one, according to Xin Hua Press reported in 2011(Xin Hua Press, Old-age Dependency Ration in China). Although this figure is not as high as 40 percent in Japan (Zeng, Demographic Imbalance Plagued Japan), it is rising in recent years, and thus brings huge pressure to the pension payment. And China’s retiring age has remained unchangeable since 1950s, regardless of longer life span and better health. All tends to indicate we will suffer labor decrease in the near future.
On the
Advocates of extending retiring age claim that most developed countries have adopted such policy and gained benefits. The main reason to prolong working years in those countries is to increase labor supply. Denmark, Norway and Iceland are three countries that set the longest retiring age---67. Besides, employees from the US enjoy a flexible retiring system, which aims at encouraging older retiring age. Japan is also implementing a plan, modifying current institutions to urge people to leave the labor market from 60 to 65 within next 20 years. Low birth ratio and decreasing population, the typical features of those countries, have caused insufficient labor supply which impedes economic growth. Therefore, extending retiring age succeeds in pulling labor back and making sustainable development.
Undoubtedly, we are facing similar aging problems that once happened in those developed countries. According to UN’s definition, an aging society is that people over 65 occupy more than 7 percent of the whole population. Statistics from the sixth national census shows that 8.9 percent of our population is over 65. Besides, old-age dependency ratio in China has reached to 20 percent, which means five workers need to support a retired one, according to Xin Hua Press reported in 2011(Xin Hua Press, Old-age Dependency Ration in China). Although this figure is not as high as 40 percent in Japan (Zeng, Demographic Imbalance Plagued Japan), it is rising in recent years, and thus brings huge pressure to the pension payment. And China’s retiring age has remained unchangeable since 1950s, regardless of longer life span and better health. All tends to indicate we will suffer labor decrease in the near future.
On the
Cited: China’s Old-age Dependency Ratio in Has Reached to Nearly 20 Percent in 2011. 22 Oct. 2012. The Central People’s Government of PRC. 2 Dec. 2013 < http://www.gov.cn/jrzg/2012-10/22/content_2248730.html> Tang, Jun. Delay Retirement is Meaningless to China. 24 Nov. 2013 < http://www.pspa.sdu.edu.cn/shzlyj/html/xiafangbankuai/guanzhuredian/20131124/1921.html > Zeng, Zheng. Demographic Imbalance Plagued Japan. 3 Nov. 2011 < http://roll.sohu.com/20111103/n324369377.shtml >