Measuring impacts of retirement age extension on economic growth and labor market in China using a recursively dynamic CGE model

Min Jiang and Euijune Kim

Economic Systems Research, 2025, vol. 37, issue 2, 306-334

Abstract: This paper estimates the effects of retirement age extension on China’s economic growth and employment from 2020 to 2050 using a dynamic computable general equilibrium model. This paper focuses on the interaction between retirement and youth employment, particularly the substitution between young and older workers and the trade-off between male and female workers. According to the reform speed of the retirement system, nine policy scenarios are designed, which are divided into three policy options: slow, gradual, and fast reform. The simulations indicated the extension of the retirement age will indeed have a positive impact on China’s GDP growth and the optimal policy is to gradually delay the female retirement age from 50 to 60. Meanwhile, the share of women in their 30s and 50s in total labor demand is intended to increase by 2.01–2.05%, while the employment share of young and middle-aged men will decline by 1.32–1.68%.

Date: 2025
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DOI: 10.1080/09535314.2024.2444604

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