China Increases Worker Retirement Ages
China’s legislature recently approved a policy that raises the retirement age for workers. The new policy raises the retirement age of men from 60 to 63. The retirement age changes for women are based upon the type of work they do. The retirement age for women with professional careers will change from age 55 to 58. Working class women’s new retirement age will change from age 50 to 55.
These retirement age increases will be put into place gradually over a fifteen-year period. The new policy is designed to address the needs of China’s declining population and aging workforce.
Reasons for the Retirement Age Increase
The previous retirement ages were created in the 1950s when life expectancy in China was about 40 years old. The current life expectancy for China is 78.7 years of age. By the year 2035, China’s population aged over 60 is expected to be 400 million. That is more than the current total population of the United States.
China’s population decreased in 2022 for the first time since 1961, falling by 850,000 people. In 2023, the population decreased by an additional 2 million people. Some of these declines in population can be explained by the COVID pandemic. Increased urbanization and more females in the workforce are other possible factors for the population decline.
Effects of One-Child Policy
A major factor for the trend of decreasing population was China’s population control policy that was in place from 1980 to 2015. That policy limited married couples to having only one child. In 2016, the Chinese government allowed married couples to have two children. In 2021, the limit was increased to three children. But this allowance for more children is coming too late to fix the existing imbalance between an older generation that is living longer and withdrawing more retirement money from the country’s pension fund. There are not enough younger workers earning money and contributing back into the pension fund.
Other Countries Raising Retirement Ages
China is not the only country that is dealing with issues related to an aging population. The United States and many European countries have made changes in retirement ages in recent years. In the United States, those born after 1960 can begin receiving full Social Security benefits at age 67, an increase of two years from Social Security’s historical standard retirement age of 65.
Spain, Italy, and the Netherlands have experienced similar increases in retirement ages to those of the United States. In France, where the retirement age has been 62, a 2023 policy to increase the retirement age to 64 is very unpopular and is still being opposed.