Delaying Retirement and China’s Pension Payment Dilemma: Based on a General Analysis Framework

To cope with the aging of the population and strengthen the wealth of basic old-age insurance to ease the dilemma of pension payment, the Chinese government is actively formulating the policy of delaying retirement. Considering the different effects of the delaying retirement policy on the insured persons of “old person”, “middle person”, and “new person”, we construct a general analysis framework of the effects of the delaying retirement policy on balance of China's basic pension. With three key variables of the delaying retirement policy simulated in a combined way, seven schemes are set up in detail to obtain the possible effects of the delaying retirement policy that may be formulated by the Chinese government. The study finds that the delaying retirement policy may not always have a positive and beneficial effect to alleviate the dilemma of pension payment, and its beneficial part accounts for about 15% of the whole. In addition, there is a U-shaped relationship between the key variable of the starting year (t
_s
) of policy implementation and the average effect of the policy. The other two key factors, the annual growth speed (Sp) of retirement age and the proportion (m) of annual growth speed of retirement age of female employees to that of male employees, change in the same direction with the policy average effect. Finally, some suggestions are provided for the Chinese government to formulate the delaying retirement policy.