Demographic Ageing and Employment in China

    1. Introduction
    China has undergone rapid demographic change over the past three decades. Largely due to a significant decline in the fertility rate, this transition has meant that China may already be described as an ageing society. In 2007 people aged 65 and above accounted for 8.1 per cent of the country’s total population.China, a grey country but not rich, faces the many challenges involved in supporting a growing number of elderly.
    Another transition complicates these challenges. China is in the process of transforming its economy into a market system. Labour market dislocation resulting from this transition, as well as the fact that in the planned economy there was not a wellestablished pension system, has led to old age poverty. For old people in rural areas, the experience has been even worse than in urban ones. Despite efforts by the Chinese government to establish a rural pension system, support for the elderly in rural China has come primarily from family members. However, household size has been declining.
    Furthermore, older people are facing substantive labour market disadvantages. In an economy dominated by labour intensive industry, older workers are not seen as competitive as their younger counterparts. Furthermore, for historical reasons, such as the Cultural Revolution, older workers have lower levels of education.
    This report explores the main economic and labour market issues and implications of population ageing in China and presents an overview of current policy responses. It is organized as follows:
    Section 1 describes the main demographic transition resulting from population ageing in China. Section 2 analyses overall labour market trends and labour market outcomes for older people. It also explores retirement patterns, re-employment of older workers and employers’ attitudes towards them. Section 3 describes the overall state of poverty in China and of poverty among the older population in both urban and rural China and also looks at government interventions aimed at reducing poverty. Section 4 analyses the pension system in both rural and urban areas and the final section concludes the report with some policy suggestions.
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    ( Employment Sector,Employment Working Paper No. 57,International Labour Office, Geneva, 2010 )