Labor Market Implications of Pension Reform: Analyzing Delayed Retirement Policies and Fiscal Adjustments in Aging Economies

Tiantian Dai (), Hua Fan () and Shenyi Jiang ()
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Tiantian Dai: China Economics and Management Academy, Central University of Finance and Economics
Hua Fan: Center for Industrial and Business Organization and Institute for Advanced Economic Research, Dongbei University of Finance and Economics
Shenyi Jiang: China Economics and Management Academy, Central University of Finance and Economics

Annals of Economics and Finance, 2025, vol. 26, issue 1, 247-280

Abstract: This paper employs a labor search model with two different skill-intensive markets to examine how pension systems and fiscal policies influence the young and the old unemployment rates in an aging population. In general, adjust- ments to the meeting rates, statutory contribution rates, and fiscal policies exert ambiguous effects on the labor market, and spillover effects arise as firms cannot discriminate based on age when hiring. The paper calibrates the model using Chinese data to quantify the impact of retirement policy reforms during the first decade of the 21st century, and it highlights each influencing channel using the counterfactual experiments.

Keywords: Aging; Pension reform; Unemployment rates; Labor search (search for similar items in EconPapers)
JEL-codes: E24 H55 J26 J64 (search for similar items in EconPapers)
Date: 2025
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