In recent years, aging population has been accelerating in China, which exacerbates the decline in Chinas potential economic growth to a certain extentThrough qualitative and quantitative analysis, the paper finds that the elder group under the current definition has a great potential in increasing labor supply, which can improve the labor force participation and release a sizeable “sunset dividend” through the implementation of postponing the retirement age policyThis paper uses the Six Census data for the first time to estimate the labor participation rate curve along with age, then simulate and analyze the potential impacts of two incremental retirement schemes on labor supply and economic growth, respectivelyThe results show that the implementation of progressive retirement age policy can significantly improve the labor supply and economic growth in ChinaParticularly during the first five periods of the implementation of the policy, it can increase labor supply by 200-300 million and GDP growth by more than 05 percentage points for each periodIt can effectively alleviate the adverse impacts of the decline of workingage population on Chinas labor supply and economic growth, thus providing a valuable time window for completing the conversion from a quantitydominated demographic dividend to a qualitydominated demographic dividend in China