Getting Life Expectancy Estimates Right for Pension Policy: Period versus Cohort Approach

Mercedes Ayuso, Jorge Bravo, Robert Holzmann

Research output: Working paper

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Abstract

In many policy areas it is essential to use the best estimates of life expectancy, but it is vital to most areas of pension policy. This paper presents the conceptual differences between static period and dynamic cohort mortality tables, estimates the differences in life expectancy for Portugal and Spain, and compares official estimates of both life expectancy estimates for Australia, the United Kingdom, and the United States for 1981, 2010, and 2060. These comparisons reveal major differences between period and cohort life expectancy in and between countries and across years. The implications of using wrong estimates for pension policy, including financial sustainability, are explored.
Original languageEnglish
PublisherMunich Society for the Promotion of Economic Research ‐ CESifo GmbH
Pages1-30
Number of pages30
Publication statusPublished - 2018

Publication series

NameCESifo Working Papers
PublisherMunich Society for the Promotion of Economic Research ‐ CESifo GmbH
No.7349
ISSN (Print)2364‐1428

Keywords

  • Cross-country comparison
  • Lee-Carter
  • Life expectancy indexation
  • Balancing mechanism

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    Ayuso, M., Bravo, J., & Holzmann, R. (2018). Getting Life Expectancy Estimates Right for Pension Policy: Period versus Cohort Approach. (pp. 1-30). (CESifo Working Papers; No. 7349). Munich Society for the Promotion of Economic Research ‐ CESifo GmbH.