China’s Ageing Economy Brings Retirees Back Into the Workforce

Lu, a former professor of electrical engineering, recently stepped down from his job at a university in southwest China’s Sichuan province after hitting retirement age.

But, in a break from normal practice, the 62-year-old’s long career at the school is far from over. In September, Lu will return to the faculty – this time as a research fellow.

“The university hoped that I could continue working on some of the projects I haven’t finished, because I am one of the most experienced professors,” Lu said.

For his new role, Lu accepted a monthly salary of about 10,000 yuan (US$1,470), less than before his retirement. The school will also no longer make social security contributions on his behalf, given he is already receiving a pension. But Lu said the deal worked for him.

“Money is less of a consideration for me now,” he said. “I can’t really just sit idle, so I was quite happy when the university asked if they could rehire me.” This kind of arrangement is becoming more common in China as the government grapples with the effects of a rapidly ageing society.

With the country’s working-age population already shrinking, a wave of public-sector employers – ranging from government agencies to universities and hospitals – are launching recruitment drives targeting “silver-haired professionals” in an attempt to avoid losing too many skilled workers.

More than 323 million people in China – or about 23 per cent of the population – were aged 60 or above as of late last year, according to the National Bureau of Statistics, and the figure is set to continue climbing over the coming decades.

In response, Beijing has announced plans to gradually raise China’s retirement age from 60 to 63 for men and 55 to 58 for female office workers – bringing China closer to countries such as the United States and United Kingdom, where the full retirement age is now 67 for most workers.

But Chinese employers still face a dilemma as millions of workers approach retirement and the pool of available talent dwindles, a trend that is leading more public-sector units to recruit retirees.

In June, the transport bureau in southwest China’s Yunnan province announced plans to hire 42 retired engineers to serve as project consultants helping to mentor younger staff members. Quanzhou, a city in the southeastern Fujian province, launched a similar campaign earlier this year.

Universities in a wide range of Chinese regions – including Anhui, Heilongjiang, Inner Mongolia, Shandong and Sichuan, among others – have also issued notices about rehiring elderly faculty members in recent months.

The push to bring elderly professionals back to work extends to healthcare as well. In late June, a public hospital in China’s northwestern Xinjiang region announced it was seeking to recruit five retireddoctors.

“As China becomes a fully-fledged ageing society and its delayed retirement policy is just getting under way, there is a vast pool of healthy retirees who have been resting at home,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a government-affiliated think tank.

“How to unlock their potential has long been a subject of discussion.” In the private sector, rehiring elderly professionals is far from a new concept, though private companies face restrictions when recruiting former public-sector workers, according to Peng.

While the practice is now starting to become more common in the state sector, it has yet to go fully mainstream, he said. “If the public sector becomes increasingly engaged in promoting elderly employment … it could significantly accelerate the overall trend,” he added.

But China will need to strike a delicate balance as it brings more retirees back into the workforce, as the country’s labour market is currently caught in a paradox, Peng noted.

In the long term, a shrinking workforce threatens to act as a drag on the Chinese economy. But in the short term, the country is grappling with a high youth unemployment rate, with millions of graduates struggling to find well-paid jobs.

“While policymakers look to older citizens to rejoin the workforce and ease the pressures of an ageing society, recent graduates are simultaneously facing a highly competitive job market,” Peng said.

“This friction is deeply intertwined with the current economic headwinds and artificial intelligence-driven job displacement.”