Extension Of Retirement Age Research Articles

On the Socio-Economic Effects of the Retirement Age Extension

The extension of retirement age is a hot issue of debate in South Korea. The unprecedentedly rapid aging due to the low fertility and longevity made the South Korea to show the highest level of old-age poverty among OECD countries. The rapid ageing brings the shortage of labor supply and the old-age poverty. The shortage of labor supply will eventually bring a slowdown of growth potentials of the economy. The alternative for the shortage of labor is the extension/delay of retirement. We analyze the impact of raising the retirement age on the employment, industry output, and economic growth. We used CGE model to analyze the retirement extension in South Korea. The overall effects can be summarized as follows: (1) the delay of retirement causes the increase in labor employed by –0.007% ~ 0.248%, and the real wage changes by –0.190 ~ –0.093. (2) Employment by industry varies according to the labor skills required in that sector. In general, the skill-intensive sector has higher employment growth. (3) The delayed retirement in the skill-biased sector cause real GDP to grow more (e.g., professional services, etc.).

Rederivation of Gertler’s model and analysis of the Korean economy

This paper makes a theoretical contribution by providing clear and detailed derivation of economic agents’ decision problems including elastic labor supply in Gertler’s overlapping generation (OLG) model. We apply the model to the Korean economy by calibration based on Korean economic data. It also analyzes the impact of current social issues such as aging and extension of retirement age, on the Korean economy in a long-run equilibrium. Subsequently, we also discuss the implications of the analysis. Aging has prolonged the period of retirement; therefore, population structure changes by the increase in the proportion of retirees, the total consumption-to- GDP ratio decreases, and capital stock increases due to reduced propensity to consume out of wealth in preparation for an individual’s retirement life. The implementation of retirement age extension increases the proportion of retirees relatively less and alleviates fluctuations in labor supply and the share of financial assets for both economic agents. However, the decrements in consumption-to-GDP ratio is larger than before, and this leads to a larger rise in the capital stock compared to when there is only an aging effect.

T21 China 2050: A Tool for National Sustainable Development Planning

The Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda are a key focus for implementing the Sustainable Development (SD) concept. But generally speaking, SD goals and targets are continuously evolving, country specific, complex to implement, and are often given relatively short time horizons, such as the 15-year horizon for the SDGs. Many SD issues need a much longer time horizon as the policy interventions to deal with these issues can take decades before their effects become apparent, which is especially true for China. The T21 China 2050 is developed to study the long-term SD challenges and opportunities of the country. In its business-as-usual simulation to 2050, T21 China 2050 reveals some of the sustainability challenges facing China, including 1) aging population and labor force decline, 2) huge food imports, 3) land degradation and loss of arable land, 4) water shortages, 5) huge fossil fuel imports, and 6) carbon dioxide emissions. These SD issues are a subset of the SDGs specifically relevant to China over a time horizon well beyond 2030. The model is then used to test possible policy interventions in these six areas under two separate scenarios: Balanced and Narrowly Focused. The major results from these two scenarios are compared with those of the business-as-usual scenario. The simulations show that by adopting certain policy measures, China's path towards SD can be further improved. It also shows that a variety of policy measures can be selected and tested with the T21 China 2050 model for exploring the future SD prospects of the country. Specific policies recommended include: extension of retirement age, adjustment of the current family planning policy, protection of agriculture land, promotion of agricultural R&D to raise yield, improvement of public transportation to slow private vehicle ownership, increased investment in renewable energy, and water conservation.

Preparing ageing workers for the future: implication for facilitating middle-aged workforce following the decline of working age population in Korea

The purpose of this study is to take a look at the legal system and various cases of human resources projects currently in operation by the government and local governments in accordance with the obligatory extension of retirement age and mass retirement of the baby-boom generation, and provide base data for the government and business enterprises to devise appropriate human resource development system for the middle-aged with the goal of securing stable lives for the middle-aged and modifying the financial burden of business enterprises as well as presenting policy implications thereof. The implications of this study may be found in the fact that the formulated study result may contribute to the high quality of education program development and facilitation of the middle-aged human resources for the government and business enterprises from the extension of retirement age.

((( (OLG)) (Population Ageing and Extension of Retirement Age (Quantitative Analysis Using Overlapping Generation Model))

Korean Abstract: 본 연구는 「세대 간 중첩모형(OLG)」을 이용하여 사망률 및 출산율 저하로 인한 인구고령화가 한국 경제에 미치는 영향을 정량적으로 분석하였다. 또한 고령화된 경제에서 정년연장 정책의 시행이 거시경제 전반에 미치는 효과를 살펴보았다. 사망률이 하락하는 경우, 기대수명의 증가로 장기화된 은퇴 후 소비에 대비하여 개인의 저축이 늘어나고, 상대적으로 저축률이 높은 장년 및 고령층의 인구 비율이 증가함에 따라 총자본량이 크게 증가한다. 반면 사망률 하락으로 인한 인구증가의 대부분이 60세 이상 고령층에 집중됨에 따라 총노동투입량의 증가는 미미하다. 출산율이 하락하는 경우, 총인구의 감소와 청·장년층 인구비율의 하락으로 총 노동투입량이 대폭 감소할 뿐만 아니라 총인구의 감소로 총저축도 크게 감소하여 총자본량도 큰 폭 하락한다. 한국경제를 대상으로 모수설정을 통해 사망률(전 연령의 사망확률이 매년 1%씩 하락)과 출산율(인구증가율이 0.7%에서 0.3%로 하락)이 동시에 하락하는 고령화 경제의 영향을 살펴본 결과 총노동투입량의 대폭 감소로 총생산량이 약 15% 정도 하락하며, 은퇴자의 증가와 청년층 인구 감소로 연금재정이 크게 악화되는 것으로 나타났다. 고령화경제의 부정적 영향에 대응하여 정년연장(3년) 정책을 시행할 경우, 총 노동투입량이 증가할 뿐만 아니라 은퇴자의 저축량 증가로 인해 총자본량도 증가하여 인구고령화의 부정적 영향이 일정 부분 완화되는 것으로 나타났다. 또한 이 경우 연금재정의 적자폭도 상당부분 개선되었다.English Abstract: This paper studies the quantitative effects of population ageing caused mainly by declines in fertility and mortality rates in the Korean economy. It also examines the overall macroeconomic effects of the extension of mandatory retirement age on an ageing economy. A decrease in mortality rate raises aggregate capital input in the economy since individuals save more for retirement due to the longer life expectancy and the enlarged proportion of the middle- and older-aged population in the total population. In contrast, an increase in aggregate labor is negligible since most of the population increases are attributable to the increase in the population over 60, most of whom are out of the labor force. A decrease in the fertility rate reduces both aggregate capital and labor inputs because of the reduction in total population, especially in young and middle aged groups. With a reasonable calibration (the mortality rate decreases by 1% a year; and the population growth rate declines from 0.7% to 0.3%), our model forecasts that the aggregate production will decrease by 15% and the pension system will run a big budget deficit with more retirees and smaller number of workers. The model also predicts that the introduction of extension of retirement age (3 years, from 57 to 60) can alleviate the negative effects of population ageing by increasing both aggregate capital and labor inputs and reducing pension deficits.

AKTYWNOŚĆ FIZYCZNA DOROSŁYCH MIESZKAŃCÓW KATOWIC A WYBRANE UWARUNKOWANIA ZAWODOWE I SPOŁECZNO-EKONOMICZNE

The issue of physical activity (PA) is often addressed in the literature, but its socio-economic determinants are fully recognized. To date no studies of the adult population of Katowice have been carried out. Research in this area is of great importance in the context of the documented influence of PA on health and extension of retirement age in Poland. The aim of this paper is to evaluate the relationship between PA and socio-economic status of adult residents of Katowice. The study carried out in 2010 comprised 2053 people (987 women and 1066 men) aged 30-65 years. To evaluate PA in the study group the diagnostic survey method and a research tool in the form of an abridged version of the International Physical Activity Questionnaire (IPAQ), with specification expanded by the authors, were used. In the statistical analysis logistic regression was employed. The likelihood of meeting the standards of health-enhancing PA was higher in men than in women and it decreased with age and education level of the respondents. The highest proportion of those meeting the recommendation of health-enhancing PA was observed among blue-collar workers, operators, teachers, police and soldiers. The lowest probability of meeting the recommendations of the American College of Sports Medicine was found among economists and lawyers, office workers, the unemployed, managers, and engineers, pensioners and health care professionals. The study demonstrates the correlation between PA and socio-economic status of the respondents. The analysis of the results indicates the necessity to promote PA programs mainly among women, the elderly, the unemployed, pensioners and representatives of professions, such as economists, lawyers, managers, engineers, and health professionals.

Value-added Effect of Labor Productivity in Extending the Mandatory Retirement Age: Evidence from Korea

In this study we use an inter-industry analysis to evaluate the economic ripple effect of the mandatory retirement age extension system. The data employed herein include the industry input-output table and labor data. The labor productivity table by age and industry was generated using the results of a survey. The survey was conducted among the manufacturing and service sectors. The average wage by industry and age (Ministry of Labor, Monthly Labor Statistics Survey) and the number of wage workers by industry and age (National Statistical Office) were also determined to be used in this study. The principal empirical findings of this work are that the extension of mandatory retirement exerts a value-added effect ranging from a minimum of 1.02 trillion Kwon (about 1 billion US dollars) to a maximum of 3.01 trillion Kwon (about 3 billion US dollars). If the mandatory retirement age is extended from the current 55 to 60, the industries that benefits from the largest value-added effects are the public administration and education service sectors. This means that more workers will continue to work after the age of 55 relative to other industries, or that the wage levels of workers over the age of 55 will be higher, or that the decline in the productivity of these workers will be lower. The economic ripple effect of the extension of mandatory retirement age is estimated to be quite immense. The extension of retirement age should begin in the service sector, in which the loss of productivity is anticipated to be relatively small. This study addresses a variety of policy remedies to soft-land the extended mandatory retirement age, and to enhance its social benefits.http://dx.doi.org/10.5755/j01.ee.22.4.715

Recent extension of retirement age in Japan.

Recent extension of retirement age in Japan.