Extension Of Life Expectancy And Deferring Retirement

The extension of the life expectancy brings more and more pressure to the residents of China.In order to alleviate this pressure and effectively manage and avoid the risk of pension,more and more experts and scholars have put forward the policy suggestions for the delay of retirement.At present,China has confirmed the policy reform direction of the gradual delay of retirement,but the detailed implementation rules have not been promulgated.How to implement the policy of postponing retirement has closely connection of people's livelihood making it great value of doing research.By considering factors of retirement,based on a two-period Overlapping Generation Model,under the hypothesis of perfect competition,full employment and the assumption of government controls the retirement age,this paper has built up a model from the aspects of individual,enterprise and government behavior,capital market equilibrium and the social planner's perspective to study the relation between expected life expectancy and retirement age under general equilibrium.By using the principle of optimality and the methods of comparative static analysis and evaluating simulation,this paper concludes that expected life expectancy may has positive effect on the retirement age under the maximum of social welfare and present an inverse functional form.And we examine that,if the adjustment mechanism between the population expectancy and the retirement age is not established,sudden changes in life expectancy will possibly lead to social welfare losses.At the meanwhile,based on the two period Overlapping Generation Model,this paper establishes an individual retirement decision-making model.In the process of utility maximization,we find that the public may oppose delayed retirement because of high wage level,high capital return,low delay retirement return and high leisure preference.As a result,under the background of extended life expectancy in China,it is recommended that the government should consider establishing an adjustment mechanism for life expectancy and retirement age and increase the publicity of the policy and improve the return of the delay of retirement to alleviate the contradiction between government decisionmaking and public will.At the end,this paper discusses a method of introducing leisure preference into the overlapping generation model,differentiating consumption into leisure consumption and time-consuming consumption,transforming the leisure time which is difficult to quantify into leisure consumption.And in this case,it is found that the optimal retirement age under steady state is also improved with the extension of life expectancy.