Addressing Longevity Inequality: How Retirement Age Differentiation Can Be Implemented

Svend E Hougaard Jensen, Thorsteinn Sigurdur Sveinsson and Gylfi Zoega

CESifo Economic Studies, 2024, vol. 70, issue 1, 1-16

Abstract: Differences in life expectancy across socioeconomic groups create a serious problem of inequality within the public part of the pension system. This article considers two actuarially sound ways of addressing longevity inequality. The first is to allow low life-expectancy workers to retire earlier and delay the retirement of the high life-expectancy workers so that the two groups receive the same amount, equal to the expected discounted value of future pension benefits received by the average worker under the current system. The second, and more radical, is to delegate to occupational pension funds the task of paying out the public pension benefits to each retiree, based on a lump-sum transfer from the government to the pension funds of an amount for each retiree equivalent to the payout in the first scenario. (JEL codes: E21 and E24)

Keywords: longevity; retirement; inequality (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1093/cesifo/ifad012 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cesifo:v:70:y:2024:i:1:p:1-16.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

CESifo Economic Studies is currently edited by Panu Poutvaara

More articles in CESifo Economic Studies from CESifo Group Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().