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Total-employed longevity gap, pension fairness and public finance: Evidence from one of the oldest regions in EU

Fabrizio Culotta, Leonardo Salvatore Alaimo, Jorge Miguel Bravo, Enrico di Bella and Luca Gandullia ()

Socio-Economic Planning Sciences, 2022, vol. 82, issue PA

Abstract: This work analyses the mortality differential between the total and the employed population for the Italian region of Liguria in 2015–2019. Values for life expectancy at ages [65, 74) are used to quantify the transfer mechanism implicitly triggered when, in the case of persistent longevity heterogeneity, a country-wide longevity factor is adopted in calculating pension annuities. Results confirm that a lower mortality force characterises the employed population of Liguria compared to the total population. In terms of implicit tax/subsidy rates, Liguria total population is almost unaffected, being taxed by an average of 0.05% of the fair value for pension. Instead, Liguria employed population is subsidised by 6.24%. Longevity heterogeneity directly impacts on public finances, if not compensated within the same cohort by socio-economic groups living shorter. Some corrective policies are discussed.

Keywords: Longevity heterogeneity; Employment; Italian pension system (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.seps.2021.101221

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Handle: RePEc:eee:soceps:v:82:y:2022:i:pa:s0038012121002135