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ife Expectancy Extension, Retirement Age Rise and Economic Growth

【Authors】
JING Peng, ZHENG Wei
【WorkUnit】
JING Peng (Southwestern University of Finance and Economics, 611130)ZHENG Wei (Peking University, 100871)
【Abstract】

This paper examines the impact of life expectancy extension and retirement age rise on economic growth by constructing an overlapping generation model with fiscal expenditure and endogenous fertility rate, and sets targets to explore how to adjust the retirement age as life expectancy increases. The study finds that life expectancy extension will lead to a decline in fertility rate, output per labor and total output but an increase in the proportion of fiscal pension expenditures, while raising the retirement age will lead to a rise in fertility rate, output per labor and total output but a decline in the proportion of fiscal pension expenditures. It shows that raising the retirement age can offset the negative impact of life expectancy extension. Under the goals of no increase in fiscal pension burden and no reduction in output per labor or total output, the retirement age threshold rises along with life expectancy extension, but the economic effects are quite different, and the fertility rate decreases in all the three cases. The policy implications of this paper are that, against the background of life expectancy extension, raising the retirement age is a reasonable and necessary policy option. Establishing an adjustment mechanism linking the retirement age to life expectancy, broadening pension financing channels and improving maternity supporting policies will help curb the decline in fertility rate, alleviate the fiscal pension burden and boost economic growth.


JEL:H55, J18, O11

【KeyWords】
Life Expectancy, Retirement Age Rise, Fiscal Burden, Economic Growth