The Paradox of Early Retirement and Re-employment: Research on Motivation, Mechanism and Optimization of Retirement Policy

With the second baby boom generation entering retirement age and the trend of low birth rates, China's aging process is accelerating. Coupled with early retirement, the full development of the elderly human resources in China has not been achieved, which restricts economic development and increases the pressure on pension insurance expenditures. Relatively speaking, re-employment among younger elderly people is also a common phenomenon. CHARLS data shows that the proportion of early retirement is approximately 20.29%, and among the early retired elderly, 37.48% choose to re-employ. Why does the paradox of early retired elderly re-employment exist? Under the dynamic adaptation theory and human capital theory, this project uses the cross-sectional data logit model to study the motivation and influence mechanism of early retirement on the re-employment of the elderly based on the data from the 2018 China Health and Retirement Longitudinal Study (CHARLS). It further uses the number of years of early retirement as an instrumental variable to address the endogeneity problem, and investigates whether there is a transitional employment mechanism. Finally, in light of the implementation of the delayed retirement policy in China and the current situation of elderly re-employment, relevant policy suggestions are proposed for further developing the human resources of the elderly.