As we’ve touched on in class, China’s population is rapidly aging. China’s working age population–those between 16 and 59–suffered a 2.4 million drop to 920 million in 2013 and the “elderly” population, those over 65, increased from 9.4% in 2012 to 9.7% in 2013. In order to counteract this drastic decrease in the labor-force, there are rumors of the Chinese government raising the age of retirement.
Currently, the age of retirement is 60 for men and 50 or 55 for women, with the average age of retirement for both men and women around 54 years old. Vice minister at the Ministry of Human Resources and Social Security, Hu Xiaoyi, admits that “That is a little low.” While some experts argue that China should not change its current retirement rules because of China’s relatively low labor participation rate, China’s hukou system and difference in education levels between retirees and young people present the country with a challenge. The current young people are too educated for the urban jobs being vacated by the retirees and the rural Chinese who would work the jobs cannot because the hukou system restricts their movement. It will be interesting to see whether China reforms its hukou system or raises its retirement age in order to remedy this problem.