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The limited power of socioeconomic status to predict lifespan: Implications for pension policy

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  • Baurin, Arno

Abstract

Differences in life expectancy across socioeconomic status are well known and many economists argue that they should be taken into account when designing pension systems. This paper analyses the relevance of using socioeconomic characteristics to differentiate the retirement age. Using US mortality rates assembled by Chetty et al. (2016), we simulate the lifespan distribution both across and within socioeconomic categories. Then, we analyze these categories’ ability to predict the lifespan of individuals. Results suggest that socioeconomic status has a relatively limited predictive power, due to the huge lifespan heterogeneity “within” each of them.

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  • Baurin, Arno, 2021. "The limited power of socioeconomic status to predict lifespan: Implications for pension policy," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    • Handle: RePEc:eee:joecag:v:20:y:2021:i:c:s2212828x21000323
    DOI: 10.1016/j.jeoa.2021.100339
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    1. Vandenberghe, Vincent, 2024. "Partial de-annuitization of public pensions vs. retirement age differentiation: Which is best to account for longevity differences?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 23(1), pages 111-131, January.

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    More about this item

    Keywords

    Pension policy; Pension progressivity; Lifespan; Tagging;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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