China Eyes Elderly Employment Amid Shrinking Labour Force

Qiu has been scouring Shanghai’s labour agencies for a job for her 58-year-old father – a former mechanic from neighbouring Jiangsu province caught in a frustrating limbo.

While he is still years away from the official retirement age for rural migrants, his struggle to find work underscores a paradox in China’s financial hub: even as the city desperately needs more workers to counter a shrinking population, ageing jobseekers are being met with high fees and physical exhaustion.

His search coincides with Shanghai’s sweeping new government initiative to mobilise the elderly and stave off a worsening demographic crisis. “In the countryside, retirement only starts at 60, so he’s still looking for work,” she said. “Right now, he’s going to labour agencies to register and is waiting for any suitable jobs to come up.” But the process has proved frustrating. “Some agencies charge high upfront fees – about 1,200 yuan (US$175) – before they even introduce any work, which doesn’t feel very reliable,” Qiu said. “And even then, it’s hard to find anything suitable.” Most of the jobs on offer involve long hours and physically demanding labour, she added. Qiu said her father began looking for work partly because he has more free time now that his grandchildren are older, but also because social protections in rural areas remain limited, prompting him to save for his own future.

His job search comes as Shanghai is encouraging older workers to re-enter the labour market. The financial hub recently drew widespread attention after unveiling a plan to keep older residents active in the workforce. The proposal, jointly issued by 28 government departments, aims to expand employment support for seniors and promote the development of age-appropriate jobs and related human resources services. Measures include encouraging companies and social organisations to create roles tailored to older workers, supporting firms in the elderly care sector to hire seniors as project evaluators, and promoting the continued participation of retired teachers, doctors and technical professionals.

The initiative comes amid a renewed response by the world’s second-largest economy to alleviate mounting demographic pressures. By the end of 2025, China’s population aged 60 and above had reached 323 million, accounting for 23 per cent of the 1.4 billion total.

The efforts are made amid mounting pension pressure, as a shrinking workforce and rapidly ageing population strain social security finances.

Shanghai is among the most rapidly ageing cities, with registered elderly residents aged 60 and above reaching 5.77 million, or 37.6 per cent of the registered population.

At the same time, the legacy of China’s one-child policy and declining birth rates in recent years have further skewed the population structure, increasing the aged-care burden on younger generations.

“As birth rates decline, securing a stable labour force has become a key challenge,” said Peng Peng, executive chairman of the Guangdong Society of Reform think tank. “The government is extending the retirement age and promoting the use of artificial intelligence across industries, and bringing older workers back into employment has become a third, and more recent, option.” He added that practical challenges remain, including whether sufficient legal protections are in place and whether older workers can receive comparable treatment to younger employees.

The Shanghai plan has also sparked debate online over whether older workers could displace younger jobseekers, particularly as the national rate of unemployment for the 16-to-24 age group, excluding students, has been high for years – recently around 16 per cent. However, a study released in January by Peking University’s National School of Development found that higher employment among the elderly could actually support employment for that youth demographic.A percentage-point increase in elderly employment was associated with a 0.13 percentage-point rise in youth employment, according to the study findings.

China has previously signalled support for elderly employment. In September 2024, Beijing issued a policy document calling for the creation of more flexible and tailored job opportunities for older workers, along with enhanced job-matching and skills training services.

Sun Jie, a member of the Chinese People’s Political Consultative Conference, said in March that while momentum to encourage re-employment among the elderly was building, policy support was lacking.

“Policies such as unemployment insurance and job-retention subsidies can effectively incentivise companies to retain experienced workers, but current support remains relatively modest, and policy tools are still quite limited,” she said during an interview with the China Internet Information Centre news portal.

“At the same time, it is important to strike a balance between opportunities for retirees and younger workers,” added Sun, who is also deputy dean of the School of Insurance at the University of International Business and Economics.