Projecting the human capital stock from a health perspective among the young elderly in China, 2025-2035

With declining fertility rates and longer life expectancy in most countries, population aging has become a global challenge. China is also undergoing a similar demographic transition, leading to a relative decline in the labor force. Postponing the retirement age has been proposed as one possible solution. Therefore, thoroughly exploring the untapped human capital potential of China's young elderly population is crucial for effectively addressing these challenges. This study applies a comprehensive approach to estimate the human capital stock of China's young elderly population, specifically accounting for the contributions of health and cohort effects-thereby addressing existing shortcomings in research on evaluating China's human capital stock. Findings indicate that young elderly individuals in cohorts with higher average educational attainment tend to have greater returns on human capital. Additionally, health plays a more significant role in determining their human capital levels than education or work experience. The human capital stock of China's young elderly population is expected to continue growing from 2025 to 2035, despite the total population of this group peaking in 2028 and then declining.