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Lifting the official retirement age is not the answer

The contraction in China’s population has triggered renewed discussion of what the government could do to counter the demographic drag. One popular suggestion is to lift China’s statutory retirement ages, which are very low. But raising them would keep relatively few older people in work since most workers today keep working once they have passed retirement age. Only a quarter of men drop out of the workforce at that point. Indeed, despite how low the formal retirement thresholds are, the share of people aged over 65 in paid work is higher in China than it is in other major developed and emerging economies.

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