The Effects On Pension Income And Employment Caused By Raising The Retirement Age

Population aging is an universal problem that all the countries should face up.This problem in China is more serious. Western countries often adopt the measure ofraising the retirement age. The aging population leads to the payment crisis ofpension,and whether to delay the retirement has been becoming a contentious issue.This article firstly reviews the study of domestic and foreign scholars aboutsolving the pension payment pressure brought by population aging, especially reviewsthe study on raise the retirement age. Then, the paper bases on China’s nationalconditions, carefully analyses the current situation of China’s aging population andthe development tendency and the tremendous burden on pensions. The relationshipbetween raise the retirement age and pension payments are analyzed from theoreticalperspective, then the paper analyses the possible impact of raising the retirement ageon employment.Based on the qualitative analysis and theoretical analysis, this paper study theeffects on the employment and pension payment caused by raising the retirement agefrom empirical perspective. The result shows that the policy of extend retirement ageis not suitable for China in short term. Delay the retirement age can indeed have theeffect of reducing spend and increasing the income, but this effect can be ignored thatrelative to the huge pension empty account. And more importantly, raise theretirement age could lead to a serious unfair between generations, make elderlyretirees receive less pension. On the other hand, raise the retirement age makes thesituation of employment more severe, which is severe ever before in our country. Theunemployment rate will make the sharp rise.Therefore, this paper argues that raising the retirement age in the West shall notapply in China now. Faced with the reality of the pension payment crisis, our countryshould establish a new type of financing pattern for old-age. Namely, use the interestscreated by stated-owned land and natural resources rights to make social account thatpay for the old, then personal account is paid by individual and the funds in personalaccount are not allowed to misuse. Mean-while, China should increase the pensionregulation, ensure the maintenance and appreciation of the pension.