Estimation Of Optimal Retirement Age Under The Trend Of Population Aging

In recent years,the problem of Population Ageing in China has become increasingly prominent.The increase in life expectancy of the population and the decline in the birth rate have brought tremendous pressure on China's pension system.However,the social welfare system in China is still imperfect,the market for corporate annuities,occupational annuities and commercial endowment insurance have been developing slowly.Along with population ageing,the social welfare system is taking on the pension burden alone,which keeps getting worse,and it's causing the shrinkage of endowment insurance fund.For a long time,China's social security fund system has always been under the pressure of operating in the red,and with the increase of the domestic dependency ratio,this intergenerational support pressure will keep on increasing,which is not conducive to maintaining the"efficiency" and "fairness" of society.As an important solution to the current gap in pension income and expenditure in China,how to delay retirement-age scientifically has always been an important direction for the Chinese government to explore.As early as November 2008,the government has stated that they are planning to extend the retirement age when the time is right;"Decision of the CPC Central Committee on Major Issues",issued in 2013,stated that the Chinese government will begin to study the updating of the current retirement system;“The 13th Five-Year Plan for the National Economic and Social Development of the People's Republic of China"states again that the government will introduce a progressive policy that extends the retirement age,while developing occupational annuities,enterprise annuities,and commercial endowment insurance.It's certain that the delayed retirement policy will be carried out,and the optimal retirement age will also be an important direction in the development of domestic retirement policy.In this context,this article aims to find the optimal retirement age that can maintain the balance of China's social security financial income and expenditure while maximizing social welfare under the conditions of population aging.By sorting out the evolution of China's retirement system and social security system,this paper analyzes the changes in China's retirement system and pension model.And by referring to the flexible retirement systems in Western countries,it is found that under the current population ageing situation,China's social pension system is under great pressure and delaying retirement age may be one of the most effective solutions regarding these concerns.Therefore,this paper selects a generational overlap model that can simultaneously display demographic factors and government financial factors.Based on the traditional generational overlap model,government decision makers are added to include population aging and delayed retirement factors into the analysis system.It is assumed that the market is under perfect competition,the government have total control over pension expenditure and retirement age.From the perspective of government policy makers,this paper explores the optimal retirement age to maintain the balance of social security income and expenditure while maintaining a stable economic system.The result shows that under the conditions of the benchmark parameters set in our country(the output elasticity is 0.4,the total fertility rate is 1.6,and the overall pension contribution rate is 16%),the pension burden that caused by an increase of 2 years in life expectancy can be alleviated by delaying retirement for another 1.29 years.At the same time,the delay in retirement should not exceed 4.15 years,otherwise the balance of pension income and expenditure will deteriorate.Controlling the fertility rate and increasing the pension contribution rate will strengthen the effect of the delayed retirement age policy to different degrees and lower the optimal retirement age.Based on this conclusion,this article believes that China's current retirement age should be delayed by 1.5 years on the original basis.Taking the former 55-year-old retired worker as an example,this article suggests that the optimal retirement age should be 56.5 years old,and it should be adjusted gradually according to the increase in life expectancy,to the number of 57.5 years by 2030.By constructing a model and an analysis framework that comprehensively considers the two situations,this article realizes a quantitative analysis,which differentiates itself from other papers which mainly use theoretical analysis methods.Using this as an entry point,this article incorporates population structure factors and retirement system factors into the model,which can reflect the internal mechanism of determining the optimal retirement age in China more clearly and accurately.In addition,this article takes the position of pension finance in the generational overlap model into consideration,that is,it is not always in equilibrium and there is a possibility of surplus or deficit,which breaks through most related research's blind areas.The article can still be improved in a lot of ways.First of all,although the generational overlap model is used in this paper to consider population factors,it is difficult to characterize the actual population structure.Other parameters also have quantification difficulties to varying degrees.The robustness and accuracy of the model need to be further verified.In addition,the evaluation of the optimal retirement age effect is conducted only from the perspective of the government,which may lead to the neglection of individual welfare.Advanced retirement mechanisms should allow residents to choose flexible retirement options based on their own wealth,health and time.Therefore,the model design of "One fits all" may have limited guiding significance.Besides,there are many factors that need to be considered in the formulation of retirement policy and unfortunately the model in this paper can only cover some of them.The recommendations given in this article are limited to the selection of the optimal retirement age and the value of some reference indicators,which are not really enough to promote a solid policy formulation and implementation.These above issues will be the focus of my future research,and I'm excited about the work done in this article which may help solve the problem of population ageing in China.