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Urban and Rural Retirement Patterns in China: Insights from New Data

Explore the drivers of retirement incidence in China with a focus on urban and rural differences. Analysis of a major new Chinese dataset reveals significant disparities in retirement timing, influenced by factors like public pensions, family income, and mandatory retirement policies.

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Urban and Rural Retirement Patterns in China: Insights from New Data

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  1. Comments onRetirement Patterns in Chinaby Lei, Wang, and Zhao Andrew K. Rose UC Berkeley, CEPR and NBER

  2. Summary • Descriptive analysis of major new Chinese data set • Focus: What drives incidence of retirement? • Key Finding: Big urban/rural differences • Urban retire sooner • Reasons both public (pension) and private (family income)

  3. Early Days • Survey (and paper!) only recently completed • Some things unclear • Many aspects of data unexploited • Example 1: all health-, environment-related issues • Example 2: any use of longitudinal nature of data set (eventually? currently a cross-section?)

  4. Still, Applause for Data Collection • CHARLS: an enormous new data set • Big Task (>10k households, >17k respondents, spread over 150 counties, 28 provinces) • Great Potential Payoffs

  5. Urban/Rural Differences Striking

  6. Why? Potential Explanations • Mandatory Retirement Policy • Strict in urban areas, especially for SOEs … but urban less likely to retire formally/in practice (p9) • Family Wealth • Hard to test with this data; consumption reflects many things • Support from Children • Small urban/rural differences in help • Size of transfers similar for urban/rural • More rural children (33%) give transfers than urban (18%) • Public Pensions • Higher urban (70%) than rural (41%) coverage • Urban (1350 RMB) much larger than rural (74 RMB)

  7. Comment 1 • Reasonable Definition of Retirement? • Not engaging in farm/non-farm work and not searching for job • But labor force members must be able to work • Shouldn’t retirement be distinguished from chronic illness? • Especially for elderly • Doesn’t explain finding • Rural have harder work than urban, worse healthcare

  8. Comment 2 • Suspicious of urban Chinese retirement rates • ≈51% of Chinese are urban • Can they really be retiring so earlier • Absolute: >60% of urban Chinese 60-64 retired • Relative to OECD: <60% Koreans 65+ retired • 60-64 retired: Germany, Canada, Japan have <60%

  9. Comment 3 • China faces serious demographic transition • Retirement ages are young compared to other countries, longevity, expense … (males 60, blue-collar women 50, white-collar women 55) • Early retirement also common, medical reasons • Hard to imagine these won’t change • Similarly, hard to imagine rural pensions will change if government wants to urbanize

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