China's Mandatory Retirement Policy

The entire trip to China was filled with new information; I had little awareness of the culture and countless questions were sparked throughout our travels. During our in-home discussions in Tianjin, I was completely taken aback by the mention of a mandatory retirement age. I had never heard of this policy, and it is so different from what I have absorbed of American culture; everyone is encouraged to work as long as they are able to in order to save up the most money possible. In my house, grudging admiration is given to those who continue to work into their late sixties.

In addition to being astonished at a mandatory retirement age, it was also a complete shock to see a retired grandfather living in such a small space with his children and grandchildren. While we'd read about multi-generational living in class prior to the trip, it was different to actually visualize the space and how the family lived. This living situation impressed upon me how the mandatory retirement policy would extend past the retirees themselves and I wanted to explore how this policy affects the different generations within the family. It was difficult to find writing solely on the policy and its background, but I found several articles that mentioned it in connection with another issue. The aim of this paper is explorative, and in order to gain a better understanding I sought out research in articles and books that had been translated, or initially written in English. I drew on several different sources to gain a better understanding of this policy and its ramifications.

Findings

There has been a demographic transition as Chinese people gain a higher life expectancy, and birth rates drop due to the 'one-child policy' and other governmental family planning efforts (Godement 117). An estimate, based on current population trends, reported by the United Nations projects that by the year 2025, every three Chinese workers will have to support one elderly person (Tsai 569). The statistics mainly concern those who live in urban areas, because the state pension and mandatory retirement policies only affect state workers in the city. Even with dropping birth rates, several studies have placed the labor surplus at 150-200 million people in the last ten years (Godement 167), yet another intertwined factor into the mandatory retirement policy's birth and a gauge of its success.

Basic Background

Preceding the Great Leap Forward in 1958, some economists in China backed the mandatory retirement of women at fifty and men at sixty. Citing a labor surplus, this small group of scientists warned that action had to be taken in order to create jobs for upcoming college graduates. Officials disagreed, using the press to assert that there were labor shortages, and older employees were urged to stay on as long as their health permitted (Davis-Friedmann 25). After the Great Leap Forward, between 1965 and 1975, the working labor force grew from around 65 million to 98 million (Davis 226).

During this time period, not many workers took advantage of the voluntary pension program and the government was able to sustain a generous program, with common ratios of 300 workers to one pensioner (Davis 227). In 1957, one government document asserted that out of a 632 million population total, only 67,000 employees had retired and were receiving their pension (Davis-Friedmann 25).

Beginning in 1978, demographics began to put pressure on the ratio of pensioners to workers and the State Council went into action (Davis 228). In 1978, reforms were made to encourage earlier retirement and created legislation so that pension plans allowed for retirees to be replaced by one of their children as a full-time state worker (Davis-Friedmann 27), a process that had been previously reserved for families experiencing financial trouble (Davis 233).

In 1980, Deng Xiaoping initiated the idea of a stricter mass mandatory retirement program in order to "abolish the de facto lifetime tenure system of government officials" (Li 393). Retirees were compensated financially as well as politically, and many higher ranking officials still enjoyed the same political privileges once they had retired (Li 394).

In 1982, the policy regarding retirement age became cemented as law and age-based retirement for government workers was outlined without mention of health or financial stability. Women were to retire at fifty-five and men were to retire at sixty, and only employees in high leadership positions were given more leeway depending on their position (Manion 257). For a retiree to receive their pension, they were required to have worked for the state for at least ten years (Chesnais and Shuxin 19). This is notable because China's population is composed mainly of peasants and rural workers, and often those who move into the city often have short careers as government workers and are left without pension (Chesnais and Shuxin 20). So, many workers were forced to retire at the same age yet remained ineligible for their pension and were resigned to move back to the country (Chesnais and Shuxin 20).

Effects

The installment and enforcement of these policies began a complete overhaul to the employment situation, and seemingly achieved what many believe to be the main goal:

Policymakers wanted not only to retire generations of aging revolutionaries but also to establish a system of regular age-based exit from office for post-revolutionaries" (Manion 254). In the following years, the total number of retirees doubled; between 1978 and 1985 the total number of retirees increased more than 400 percent. (Davis 228)

Before the mandatory retirement policy, young workers had to pay the highest price for the country's rapid fertility increase and employment policies, and over 17 million graduates settled in the countryside in desperate search of work (Davis 226). By the early 1980s, the majority of these urban youth returned to the cities and took advantage of the newly opened jobs (Davis 226). Once the system settled down, younger employees also enjoyed more upward mobility than previous generations due to the higher turnover rate of jobs (Li 394). Still, while this generation was flourishing in the employment percentages, many children also had their parents' additional retirement to consider and support.

The research and writing that has been published on the mandatory retirement policy in China seems to present two contradictory angles: that the retirees' pensions are large enough to contribute greatly to the family that they live with, and that retirees' pensions are not large enough for them to live alone. For instance, a 1983 study in Beijing showed that retirement pensions for most elderly people are more than the family income of their children (Tsai 571). Yet, at the same time, it's argued that elderly people can not live independently on this pension by itself (Godement 117). Two factors that connect and help explain these angles are how expensive housing is in urban areas as well as how rare nursing homes are in modern China, with only 9,800 operating in the late 80s (Tsai 574).

Another aspect of retirement that was not mentioned often in the research was that pension amounts are influenced greatly by politics, and therefore the financial situations, and consequent dependency on children, of retirees may vary greatly; "For those who joined the Communist Party early, the annual pension can even amount to 13 or 14 months' wages" (Chesnais and Shuxin 20). These concerns aside, all pensions represent some form of income which lessens the financial burden on their children if they live with them, in addition to the free household work and babysitting they can offer (Chunyuan 121).

As Chinese workers are both retiring earlier and living longer, their life after state employment has changed in nature. Retirees often take on side jobs in addition to household duties by selling on the street and performing small duties (Sher 43). After retirement, most elderly men take side jobs doing petty services or selling things in addition to helping out in the home by tending the vegetable garden and keeping the yard clean. Elderly women typically take on the bulk of household work in childcare, cooking, and laundry (Davis-Friedmann 21).

While some assert that elderly family members living in with their children encourages intergenerational cooperation and helps bond the family together (Sher 42), it may create tension as well. This situation is more common as people retire younger, and it bears attention when parents are living with their children for longer periods of time after retirement. Deborah Davis-Friedmann surveyed newly retired Chinese citizens in 1978, and many respondents expressed concern at how retired mothers were expected to stay full time in the home and take care of their grandchildren (Sher 33). However, in light of the commonality that economic and financial independence is rare for elderly people living in China, very few retirees live completely off their pensions without help from other family members and therefore have to offer some benefit when traditions are questioned and they cannot turn back to regular work under the mandatory retirement policy (Chesnais and Shuxin 23). Over the years the gap between generations has grown apart from traditional closeness, and it can be argued that food distribution and authority hierarchies are unsettled by elderly grandparents retiring and moving in with younger generations as they struggle to form their own family in modern expectations (Chesnais and Shuxin 17).

In modern times, many young people want to form their own nuclear families and live separately from their parents, a trend that is greatly affecting how elderly people live on their own after retiring (Chesnais and Shuxin 25). This is in contrast to tradition, and undermines what the government planned on to sustain their retirement policies. Article 49 of the New Constitution exemplifies how the governmental law supports and requires economic interdependence between generations: "Children who have come of age have the duty to support and assist their parents" (Sher 43). The traditional custom that children take care of their parents is in the legislation, and the maltreatment or neglect of elderly parents can be punished by law (Tsai 572).

It seems that these laws will need to be clarified if younger generations take their parents' jobs and then go against the tradition that supports current economic policies by resisting multi-generational family living. If this trend keeps up, some predict that the government will be forced to re-evaluate current pension and retirement policies: "care of the elderly by their children will become less frequent and the state, and society as a whole, will therefore have to fill the gap" (Chesnais and Shuxin 25). Maltreatment and neglect will have to be re-defined as more elderly people contemplate their options and the culture evolves.

Another way that the mandatory retirement system affected multiple generations was in how it defined gender differences and in some cases encouraged sexism. One male psychologist commented on the gender differences in retirement ages:

Due to their physiology, men can work longer. The fact that women retire earlier shows the position of Chinese women in our society. We think they deserve special treatment and the government shows special concern for them. (Sher 33)

This is especially interesting when noted that elderly women continue to be economically active for a longer period of time than men of a similar age, but this labor is less recognizable because the work is often done in the household to save money as opposed to bringing in money from outside work (Davis-Friedmann 17). This system also perpetuates China's devaluation of daughters. One Chinese citizen was interviewed and said "When I am old and my daughters go to live with their husband, who is going to support me without a son?" (Chunyuan 123). The reach of the mandatory retirement policy is far, and its effects are difficult to gauge in their complexity.

Conclusion

As elderly Chinese workers live longer and retire at a fixed age, financial dependence on the younger generation is a growing problem in modern times (Godement 117). The mandatory retirement program forced older workers on to a fixed income that prevents many retirees from having the option of living alone. When moving in with their children, as tradition and now economics dictate, their pensions add to the family budget but put strain on newer generation's desire to live as nuclear families. More job openings and shorter employment terms encourage upward mobility for new employees, but the substitution clause that allows parents to fill their position with one of their own children hinders upward class mobility and discourages hard work of those who might have been born to parents who worked in the country.

It seems that the demographics of China's labor force in the 1980s forced the State Council's hand, and as more pensioners are living longer and drawing off of current worker's input change is sure to come. The effects of the mandatory retirement policy are far reaching and difficult to quantify when so much else is also changing in China's culture; but it goes without question that every generation has been impacted.

Works Cited

Beehr, Terry A., and Norma L. Nielson. "Descriptions of Job Characteristics and Retirement Activities During the Transition to Retirement." Journal of Organizational Behavior 16(1995): 681-690.

Chesnais, Jean-Claude, and Shuxin Wang. "Population Ageing, Retirement Policy and Living Conditions of the Elderly in China." Population: An English Selection 2(1990): 3-27.

Chunyuan, Zhang. "Welfare Provision for the Aged in Rural China." The Australian Journal of Chinese Affairs 15(1986): 113-124.

Davis, Deborah. "Unequal Chances, Unequal Outcomes: Pension Reform and Urban Inequality." The China Quarterly 117(1988): 223-242.

Davis-Friedmann, Deborah. Long Lives - Chinese Elderly and the Communist Revolution. Cambridge, MA: Harvard University Press, 1983.

Godement, Francois. The Downsizing of Asia. New York: Routledge, 1999.

Li, David D. "Changing Incentives of the Chinese Bureaucracy."The American Economic Review. 88(1998): 393-397.

Manion, Melanie. "Policy Implementation in the People's Republic of China: Authoritative Decisions Versus Individual Interests." The Journal of Asian Studies 50.2(1991): 253-279.

Sher, Ada Elizabeth. Aging in Post-Mao China - The Politics of Veneration. Boulder, CO: Westview Press, 1984.

Tsai, Wen-hui. "Life after Retirement: Elderly Welfare in China." Asian Survey 27(1987): 566-576.