By raising the retirement age, has China created a care crisis?

By raising the retirement age, has China created a care crisis?

CHINA’S PENSIONS are underfunded and its population is getting older. So the government’s recent decision to raise the retirement age for state pensions seemed overdue. But it may create other problems, most notably in the field of child care. And these challenges may lead young people to have fewer babies, exacerbating the country’s demographic crisis.

According to state media, under 8% of Chinese toddlers are enrolled in nurseries. Most families rely on grandparents to care for them. That is true in cities, where nearly 80% of households are thought to do so. And it is also the case in rural areas. Parents from the countryside often work far from home, leaving their children behind. Walk around some villages and all you will see are the elderly and the young.

So raising the retirement age risks creating a child-care deficit, which may affect the decisions of young women. China’s fertility rate, or the number of children that each woman is expected to have, is 1.1. That is among the lowest in the world and well below the 2.1 needed to keep the population stable. In a study published last year, Jing Zhang of Erasmus University in Rotterdam found that women who lean on grannies for care are four times more likely to have a second child than women who do not.

Many women face a choice between starting a family or continuing their careers. Chinese women are increasingly choosing the latter. But the availability of grandparent-provided child care might mean that women need not choose. Research published in 2019 showed that access to such care increased the labour-force participation of mothers with young children in cities by around 40%.

Another area likely to be affected by the higher retirement age is care of the elderly. It is common for Chinese women in their 50s to look after the old as well as the young. On social media some commenters wonder how society will cope with all this change. He Lin-shan, a popular poster on Douyin, China’s version of TikTok, asked: “If women can’t retire, will the policy experts take care of their families for them?”

© 2024, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

 

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