Wait of years

Increasing the retirement age and encouraging the elderly to participate in economic and social activities can alleviate pressures of an aging society

As the Seventh National Population Census shows, China still has abundant labor resources with a large working-age population, and the quality of its population has improved.

But China has become an aging society. As it pushes ahead to build itself into a modern socialist country, it needs to work out a national strategy to address the issue. Although its population aging is accelerating, this demographic dividend is being transformed into talent dividends.

Improving life expectancy of senior citizens has laid the foundation for exploiting elderly human resources. Before the founding of the People's Republic of China in 1949, China's average life expectancy was only 35 years. It exceeded 50 years, 60 years and 70 years in the 1950s, 1970s and 1990s, respectively. It reached 77.3 years in 2019, and is expected to reach 81.5 years in 2050.

The years of old age have steadily increased. From 1950 to 1955, a 60-year-old in China could expect to live for 11 more years. In 2015-2020, a 60-year-old in China could expect to live another 20.2 years. By 2050, the remaining life span after 60 is expected to rise to 23.8 years.

If the current ages for retirement and receiving a pension remain unchanged, the rise in the remaining years of life of senior citizens could overwhelm the pension and elderly care service systems.

A proportionately shorter working life and prolonged years of consumption will increase the burden of supporting the elderly. Therefore, it is time to delay retirement, encourage participation of the elderly in economic and social activities, and explore the potential of elderly human resources.

Developed countries were the first to feel the pressure of an aging population.

Increasing the retirement age and promoting men and women to retire at the same age have become common reform practices in developed countries, keeping the elderly of both genders in the labor force. The statutory retirement age in most developed countries is often adjusted flexibly in line with the pension income and years of payment. The retirement age can be more flexible by reducing the state pension for people retiring early and increasing it for those delaying retirement.

In 2020, the numbers of people aged 60 and above and 65 and above in China were 264 million and 191 million, representing 18.7 percent and 13.5 percent of the total population, respectively. It is necessary to be aware of and exploit the dividends of improving life expectancy for demographic, economic and social transformation in an aging society.

China's mandatory retirement age was set in the 1950s, when the average life expectancy was around 45 years old and the proportion of educated population was low.

Also, at that time, the urbanization rate was below 15 percent, and the majority of people did heavy manual labor. The total fertility rate was above 6. Today, the average life expectancy at birth is 77.3 years, and the population aged 15 and above receives 9.9 years of education on average. More than half of the newly increased labor force have received higher education. The urbanization rate has risen to 64 percent, and the fertility rate has dropped to 1.3. China has seen improving industrial and technological progress. With economic and social development, the statutory retirement age set in the 1950s is now outdated. The improvement of education has delayed the age at which the working-age population enters the labor market, while the age of retirement remains unchanged. That will lead to short working lives for groups with higher education levels, which will be a waste of human resources and loss of human capital.

As life expectancy has improved, the retirement age should be delayed.

The outlines of the 14th Five-Year Plan (2021-25) and the long-range objectives for 2035 propose delaying the retirement age and promote full utilization of human resources.

In addition to encouraging the elderly to continue working, the government also needs to explore the potential of a well-educated labor force. The fostering of high-quality labor can enhance the labor participation rate and productivity, which will drive economic growth and social development.

Since the reform and opening-up in 1978, great success has been achieved in improving the overall quality of the population and human capital. The rate of population receiving nine-year compulsory education and the gross enrollment rate of senior high schools have reached 95.2 percent and 91.2 percent, respectively, surpassing the average level in the middle- and high-income countries.

A total of 220 million people have received college education or above, accounting for 15.5 percent of the total population. Starting in 2018, the annual enrollment of colleges and universities has exceeded 10 million, indicating that the number of graduates will exceed 10 million per year on average during 2021-25, equivalent to the number of the annual newborns in the period. The improvement of comprehensive human capital has become a key driving force for China's economic growth, and brought opportunities for socioeconomic development of the aging society.

Population migration should be encouraged to unleash demographic dividends. The comparative advantages of labor force and capital distribution can promote upgrading of technology and industrial restructuring, promote the migration of population from low ends to high value-added industries, drive population flow between regions and industries, and boost economic growth.

In 2020, China's migrant population reached 376 million, an increase of 69.7 percent over 2010, accounting for 26.6 percent of the national total.

Economic and social participation of the migrant population is improving, as a quarter of Chinese people flow to the cities and towns.

Migration has changed the distribution of the population, accelerated urbanization, and driven high-quality development in the new era.

The author is director and a professor of the Research Center for Strategic Studies on Aging and Development at Nankai University. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn