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

Mercedes Ayuso, Jorge Bravo () and Robert Holzman

No 7349, CESifo Working Paper Series from CESifo

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.

Keywords: cross-country comparison; Lee-Carter; life expectancy indexation; balancing mechanism (search for similar items in EconPapers)
JEL-codes: G22 H55 J14 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-age and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

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