Reshaping Retirement Incentives in China by Up-Skilling the Elderly Workers

China's response to population aging includes up-skilling elderly workers and encouraging them to delay retirement. Using data from the China Health and Retirement Longitudinal Study (2015–2018), we find that up-skilling may trigger early retirement. In a life-cycle model, we characterize the optimal retirement age as a function of employer-provided training. We identify the critical maximum threshold for training above which training would encourage early retirement. We apply these insights to explain our empirical findings, thereby contributing to the evaluation of China's retirement policies. We also consider novel policy insights by introducing a special role of AI in our extended model.