How life-table right-censoring affected the Brazilian social security factor: an application of the gamma-Gompertz-Makeham model

Filipe Costa Souza (), Wilton Bernardino and Silvio C. Patricio
Additional contact information
Filipe Costa Souza: Universidade Federal de Pernambuco
Wilton Bernardino: Universidade Federal de Pernambuco
Silvio C. Patricio: University of Southern Denmark

Journal of Population Research, 2024, vol. 41, issue 3, No 2, 38 pages

Abstract: Abstract Automatic Adjustment Mechanisms (AAMs) are legal instruments that help social security systems respond to demographic and economic changes. In Brazil, the Social Security Factor (SSF) was introduced in the late 1990s as an AAM to link retirement benefits to life expectancy at the retirement age, hoping to promote contributory justice and discourage early retirement. Recent research has highlighted the limitations of right-censored life tables, such as those used in Brazil. It has recommended using the gamma-Gompertz-Makeham ( $$\Gamma GM$$ Γ G M ) model to estimate adult and old-age mortality. This study investigated the impact of right-censoring on the SSF by comparing the official SSF and other social security metrics with a counterfactual scenario computed based on fitted $$\Gamma GM$$ Γ G M models. The results indicate that from 2004 to 2012, official life tables may have negatively impacted retirees’ income, particularly for those who delayed their retirement. Furthermore, the $$\Gamma GM$$ Γ G M fitted models’ life expectancies had more stable paths over time, which could have helped with long-term planning. Our findings are significant for policymakers as they highlight the importance of using appropriate mortality metrics in AAMs to ensure accurate retirement benefit payments. They also underscore the need to consider the potential impacts of seemingly innocuous hypotheses on public action outcomes. Overall, this study provides valuable insights for policymakers looking to enhance the effectiveness and fairness of social security systems.

Keywords: Brazilian social security system; Gamma-Gompertz-Makeham model; Life expectancy; Automatic adjustment mechanism; Retirement benefit (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s12546-024-09334-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:joprea:v:41:y:2024:i:3:d:10.1007_s12546-024-09334-1

Ordering information: This journal article can be ordered from
https://www.springer ... tudies/journal/12546

DOI: 10.1007/s12546-024-09334-1

Access Statistics for this article

Journal of Population Research is currently edited by Santosh Jatrana, Dharmalingam Arunachalam, Aude Bernard, Vladimir Canudas-Romo, Ann Evans, Michael Haan, Brian Houle, Trude Lappegård and Gordon Carmichael

More articles in Journal of Population Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().