Abstract
This paper documents the patterns and correlates of retirement in China using a nationally representative survey, the China Health and Retirement Longitudinal Study. 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 Organization for Economic Co-operation and Development 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.
Highlights
This paper aims to understand the factors behind the retirement decision, or the decision to stop working, by estimating empirical labor supply models among the older population
When further separating by urban-rural classification, the difference only exists in urban areas and is statistically significant across most age ranges, while there is no difference in rural areas, suggesting that the rural pension may not be sufficient to support an exit from work
As the returns to a year of schooling are quite high in China, this suggests that the capacity to provide financial support in the future is lower for rural children than their urban counterparts
Summary
Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world’s largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author
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