Delay retirement
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E-mail Beijing Review, July 11, 2012
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Serving for elderly: An elderly woman carrying her grandson reads at a library in a retirement home in Du'an Yao Autonomous County, southwest China's Guangxi Zhuang Autonomous Region, on June 27. With the elderly population increasing, Guangxi plans to invest 830 million yuan ($132 million) in service facilities for the elderly in the 12th Five-Year Plan (2011-15). The 2010 census shows Guangxi has a 6.04 million people over 60 years old, accounting for 13.11 percent of the local residents [Xinhua] |
China should delay the retirement age to 65 years old by 2045, said He Ping, head of the Social Security Research Institute under the Ministry of Human Resources and Social Security, at a recent symposium on dealing with an aging society.
Serious labor shortage
According to the national census in 2010, China is the only country in the world with an elderly population outstripping 100 million. The number of people over 60 years old hit 178 million, accounting for 23.6 percent of the world total. That means one-fourth of the world's aging population lives in China.
"An aging society means that the support coefficient for elderly people will continuously increase, and meanwhile, labor devoted to that support will decrease," said Zheng Bingwen, director of the World Society Security Research Center at the Chinese Academy of Social Science (CASS).
According to Zheng, China's labor force will dwindle from 970 million in 2010 to 870 million by 2050. In 2015 the labor market will reach a turning point, and an average annual decline of 3.66 million is expected.
Li Jun, director of the Institute of Quantitative & Technical Economics under the CASS, said China's labor population between ages 15 and 59 is expected to drop to 710 million by 2050, an decrease of 230 million compared with that of 2010. "The country's labor supply will become seriously short after 2030," said Li.
Postponing retirement age
Facing the facts of an aging society, many experts suggested gradually postponing the retirement age to ease the labor inventory reduction speed.
"Some foreign countries deal with the aging problem by introducing outside mechanisms to lead laborers to delay retirement of their own will," said He Ping. He proposed China carry out a delayed retirement policy from 2016, and prolong one year longer every two years, so that by 2045, all laborers, men or women, will retire at the age 65.
Li Jun echoes He's idea to elevate the age of retirement. "Postponing retirement is not designed to promote economic growth, but ease the labor decreased speed, so that to weak expectation of labor cost increase," Li said, adding that "Timing of retirement is very important, which should be prudent when making decision."
Not currently feasible
There are differing opinions. Cai Fang, head of Institute of Population and Labor Economics under the CASS, said postponing retirement is not feasible at present. China's elderly population is less educated than their younger cohorts due to historical development issues. "The premise of elevating the retirement age is to increase labor supply, which should be elderly education level and work experiences. In other words, those who postpone retirement should have a competitive edge," said Cai.
Therefore, the retirement system should not be one-size-fits-all. It should be a flexible system, fully making use of human capital featuring high capability in technology, and meanwhile protecting ordinary laborers with less education.
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