Prediction and Improvement of Pension Replacement Rate and Sustainability under Delayed Retirement Policy in Shaanxi, China

Abstract

In this study, the researcher predicted the sustainability and replacement rate of the pension in Shaanxi, China from 2023 to 2050
with population and average wage prediction, comparing that under delayed retirement policy and without delayed retirement policy. He also
studied the improvement measures of pension in Shaanxi. In terms of population prediction, the researcher used the grey model by allelic
substitution method and the Leslie population mode. The proportion of the elderly population in Shaanxi will continue to rise, reaching 30%
in 2050. In terms of average wage prediction, the researcher found a linear relationship between it and GDP per capita in Shaanxi and used
the Logistic regression to predict it. The average wage in Shaanxi will rise from $14,345 in 2021 to $43,939 in 2050. Based on these, the
researcher found that the sustainability of Shaanxi’s pension will continue to decline, reaching break-even in 2030. And the replacement rate
keeps going up. The delayed retirement policy would extend the pension break-even to 2035 and also rise the replacement rate by about 5%.