Getting life expectancy estimates right for pension policy: Period versus cohort approach

Mercedes Ayuso; Jorge Miguel Bravo; Robert Holzmann

doi:10.1017/S1474747220000050

Getting life expectancy estimates right for pension policy: Period versus cohort approach

Mercedes Ayuso, Jorge Miguel Bravo, Robert Holzmann

Research output: Contribution to journal › Article

2 Citations (Scopus)

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
Journal	Journal of Pension Economics and Finance
DOIs	https://doi.org/10.1017/S1474747220000050
Publication status	E-pub ahead of print - 13 May 2020

Keywords

Balancing mechanism
cross-country comparison
Lee-Carter
life expectancy indexation

UN Sustainable Development Goals (SDGs)

SDG 1 - No Poverty
SDG 3 - Good Health and Well-Being
SDG 5 - Gender Equality
SDG 10 - Reduced Inequalities

Access to Document

10.1017/S1474747220000050

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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.",

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