The Effect Of Extending The Retirement Age For Employment In Cities And Towns And The Empirical Research

With the development of science and technology, hygiene, medicine, average life of the people in the world has been increased constantly. Now, almost all of the world’s population structure tends to aging except some Africa country. Less labor, huger pension gap, greater pressure of alimony and so on, in order to solve all those question, some developed countries take the policy of extending the retirement age. However, developed countries face population aging and labor shortages at the same time, which reduced the impact of a later retirement age. But without sufficient preparation in economy China is in the opposite position. Less labor, huger pension gap, greater pressure of alimony, all of these questions bring heavy pressure and challenges to this country, and make itself increasingly complex.This paper conducted a review of domestic and international about extending the retirement issues, in conjunction with the special circumstances of China about aging and employment, and the mechanism of extending the retirement age, establishing simultaneous equations model about extending the retirement, employment and macro economic development. This paper try to find the relationship between the changes in retirement age and urban employment, which by a quantitative analysis method. This paper specially considers the problem of the old and the young labor alternative, and considers the characteristics of jobs number variable, making the results more accurate.Specifically, this article analysis the present situation of the employment of our country and the mechanism of extending the retirement age, providing theoretical basis for establishing mathematical model for selecting indicators. Considering the potential changes for employment and old-age dependency rate, simultaneous equation model was constructed. The endogenous variables of this paper are unemployment and economic growth, which reflect the employment situation in our country and the macroeconomic operating conditions. This paper selects the influence factors of the unemployment rate, as well as the influence factors of economic growth rate as exogenous variables, using Eviews6.0 software for processing, estimating the form of the model. On this basis, this paper chooses to study in 2009, assuming all other factors remain unchanged, and then extending the retirement age will cause a change in employment and the elder support rate. According to the simultaneous equations model has been established, assuming all other variables constant, the change in one variable, resulting effect of changes in individual variables on the dependent variable, thus it is concluded that increasing the retirement age will have the effects of unemployment rate. Through the analysis, this paper draws conclusion that with a bigger retirement age, China will get better economic but higher unemployment. In general, extending the retirement age makes the employment situation more serious. Therefore, extending the retirement age in the short term seems to be an especially irrational choice from our country’s current national conditions.