Economic impact of retirement on the elderly population: a literature review

This literature review examines the economic impact of retirement policies on the elderly, focusing on labor supply, consumption, and health. The aging global population pressures public pension systems, prompting reforms like increasing retirement age and reducing benefits, which significantly affect labor supply, demand, and economic growth. The review discusses the effects of retirement age and pension changes on labor supply, the 'retirement-consumption puzzle,' where consumption declines at retirement due to changes in time cost and health shocks, and mixed health outcomes post-retirement influenced by health behaviors. China's fixed retirement policy offers a unique context for studying these effects, highlighting gender-specific impacts. The review emphasizes the need for balanced retirement policies that consider financial sustainability and health implications, promoting retirees' consumption levels. This comprehensive analysis aids in evaluating retirement policy reforms' costs and benefits across different institutional contexts.