Post-retirement employment behavior and older people’s expenditure: New evidence from urban China

Abstract Using data from the China Health and Retirement Longitudinal Study, this research investigates how post-retirement employment influences older people’s expenditure in urban China. By broadening the understanding of post-retirement employment behaviour from a consumer welfare perspective, this study expands the literature on retirement consumption and provides theoretical explanations, empirical insights and policy recommendations. The findings reveal that post-retirement employment behaviour reduces urban retirees’ household expenditure and has a more significant effect on men than on women, but this effect diminishes as consumption levels rise. Increasing income, promoting social participation and improving subjective health outcomes are all potential channels through which post-retirement employment can affect consumption. Further analysis shows two main reasons why post-retirement employment reduces older people’s expenditure: first, the increase in subjective health levels resulting from post-retirement employment reduces healthcare expenditure; second, post-retirement employment does not promote social participation and self-rated health for all consumption levels and all genders of retirees – it also decreases expenditure. Preliminary evidence suggests that internet use positively moderates the negative impact of post-retirement employment on older people’s expenditure. These findings provide policy implications for retirement policies and the promotion of the silver economy.