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The Limited Power of Socioeconomic Status to Predict Longevity: Implications for Pension Policy

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  • Arno Baurin

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

Differences of life expectancy across socioeconomic status are well-documented 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 retirement age. Using US mortality rate assembled by Chetty et al. (2016), we simulate the longevity distribution both across and within socioeconomic status. Then, we analyze the power of socioeconomic status to predict individuals' longevity. Results suggest that socioeconomic status has relatively limited predictive power, due to the huge within status longevity variance.

Suggested Citation

  • Arno Baurin, 2020. "The Limited Power of Socioeconomic Status to Predict Longevity: Implications for Pension Policy," LIDAM Discussion Papers IRES 2020019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2020019
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    References listed on IDEAS

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    More about this item

    Keywords

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

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • 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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