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Dancing through retirement

Dancing through retirement

I was struck by a recent Wall Street Journal article about a new craze overtaking China: retirees all across the country are “getting down,” having dance parties in parks, courtyards, and other public spaces in order to have fun and stay in shape.

In an ironic turn, the article says that the music and the noise from these dance parties annoy younger people, who are trying to sleep and get work done. These young people are so bothered by public dancing that there are efforts to regulate it as a “public nuisance.”

Boy, this sounds like the 1960s in the United States in reverse. The troublemakers in China, who just want to boogie to rock n’roll, are all over 65. And this time it is the teenagers who are yelling, “Stop all that noise!”

The article made me wonder: is this dance craze happening because retirees in China have it good in retirement and they are celebrating their happy fortunes, or is it the opposite – that they are penniless so they figure they should go out and raise a ruckus? According to the Economist, China is in the midst of a pension crisis and the country is evaluating a bevy of proposals to address the issue, including one that sounds a heck of a lot like what opponents to Social Security are advocating in the United States – an increase in the retirement age.

To learn a little more about what’s happening in China, I spoke with journalist Robert England, author of Aging China: The Demographic Challenge to China's Economic Prospects.

Robert’s short answer: the elderly may be dancing out of desperation because they worry they can’t afford to be sick. He says that most Chinese retirees have inadequate pensions or no pensions at all. But he further reflected, “Given that most of the young people will end up taking care of their elders, they should be happy their parents and grandparents are dancing today to take better care of themselves.”

Here a few facts about China from Robert:

  • For centuries, the only “pension plan” that many older Chinese citizens had was their children – sons and daughters were responsible for taking care of their parents as they aged.
  • China’s social security and pension system is highly fragmented and administered on a provincial level. Until a little more than two decades ago the only workers to receive retirement benefits were those who worked at state-owned enterprises in urban areas. At that time, two-thirds of the nation’s working age population was outside the urban areas and not covered by a social security or pension scheme.
  • China is spending some of its growing wealth on the elderly by subsidizing existing and new pension schemes aimed at providing retirement income to more segments of the nation who previously had no retirement benefit.
  • China has gone through numerous pensions reforms designed to reduce benefits for new hires compared to the highly generous old pension system, expand participation from urban areas to town and village enterprises, then to the growing private sector, and recently to rural areas.
  • An interesting feature of social security benefits in China is that in most areas supplemental benefits, which we in the United States call longevity insurance benefits, are provided at an advanced age, such as age 80. John Turner, director of the Pension Policy Center and co-editor of Social Security and Pension Reform: International Perspectives, speculates that they may be dancing so that they will be around to collect these benefits. He also notes that this feature would provide a desirable extra element of retirement security at older ages in the United States.

Despite improvements to its retirement system, it seems that China is still facing a retirement income crisis. So it’s no wonder that Chinese retirees are dancing to stay healthy and to burn off anxiety about making it through their final years. I wouldn’t be surprised if this trend migrates to the United States when American Baby Boomers figure out that they, too, may be in trouble in retirement.

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