Labor Force Participation Rate Prediction of China: Scenario Simulation Based on Education and Retirement Strategies

Abstract

This study uses detailed population statistics and analyzes labor participation rates in China from the perspectives of education and retirement. It presents different hypothetical scenarios and predicts future labor participation rates using queue factors. The results indicate that under the baseline scenario, the overall labor participation rate (51.43%) is projected to significantly decrease by 2060 compared to 2020 (73.76%). The lock-in effect of education leads to a declining participation rate for the 15–24 age group, which persists until approximately the age of 50. Generally, women have higher labor participation rates than men prior to retirement. In the education-centered hypothetical scenario, the quantity impact of educational expansion is evident. Although the relative impact of additional education diminishes toward the end of working life (60–74) compared to the entire working life (15–74). The improvement in the labor market due to educational reform is sustainable across all scenarios. In the retirement-centered hypothetical scenario, reducing retirement rates across age groups increases labor force participation, but this improvement mainly focuses on those under the age of 70 and is not sustained. Thus, delaying retirement policies is only effective in the short term.