Does the Early Retirement Policy Really Benefit Women?

Hyun Lee (), Kai Zhao and Fei Zou
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Fei Zou: University of Connecticut

No 2019-12, Working papers from University of Connecticut, Department of Economics

Abstract: China’s mandatory retirement policy requires most female workers to retire five years earlier than their male counterparts. The conventional wisdom behind this policy is that it benefits women by relieving them from work earlier and providing them with more years of public pension benefits than men. However, is the early retirement policy really welfare-improving for women? In this paper, we quantitatively evaluate the welfare consequence of China’s gender-specific mandatory retirement policy using a calibrated Overlapping-Generation model with heterogeneous agents and incomplete markets. We find that the early mandatory retirement reduces welfare for women. An important reason behind this welfare result is that China’s public pension benefits are only partially indexed to growth, and therefore women who retire earlier also benefit less from economic growth than men. Our quantitative results suggest that equalizing the retirement age across gender can generate a welfare gain for both men and women.

Keywords: Social Security; China; Mandatary Retirement; Gender (search for similar items in EconPapers)
JEL-codes: E20 E60 H30 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019-07
New Economics Papers: this item is included in nep-age, nep-cna, nep-dge, nep-gen, nep-mac and nep-pbe
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Citations: View citations in EconPapers (2)

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Journal Article: Does the early retirement policy really benefit women? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2019-12

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