Effects of delayed retirement on intergenerational education investment, saving, and welfare: Evidence from China

This study examines the effects of delayed retirement on intergenerational education investment, saving, and welfare within a three-period overlapping generations model featuring a CD-AK hybrid production framework. The analysis shows that delayed retirement encourages greater investment in children’s education, thereby promoting human capital accumulation. While the theoretical model delivers ambiguous predictions regarding household saving behavior and aggregate welfare, numerical analysis calibrated to the Chinese economy indicates that longer retirement delays are associated with increases in both saving and welfare. Extensions incorporating gender, occupation, and leisure reveal heterogeneous welfare effects: men experience smaller or even negative gains, whereas blue-collar women benefit the most in China. These results highlight the welfare trade-offs of retirement reform and underscore the importance of aligning policy design with gender and occupational structures. It may also be applicable for other aging Asian economies with similar demographic and labor market.