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

Mercedes Ayuso; Jorge Bravo; Robert  Holzmann

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 language	English
Publisher	Munich Society for the Promotion of Economic Research ‐ CESifo GmbH
Pages	1-30
Number of pages	30
Publication status	Published - 2018

Publication series

Name	CESifo Working Papers
Publisher	Munich 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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