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An Indexation Mechanism for Retirement Age: Analysis of the Gender Gap

Author

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  • Mariarosaria Coppola

    (Department of Political Sciences, Federico II University, Via Leopoldo Rodinò 22-80138 Naples, Italy)

  • Maria Russolillo

    (Department of Economics and Statistics, University of Salerno, Via Giovanni Paolo II, 132-84084 Fisciano (SA), Italy)

  • Rosaria Simone

    (Department of Political Sciences, Federico II University, Via Leopoldo Rodinò 22-80138 Naples, Italy)

Abstract

The management of National Social Security Systems is being challenged more and more by the rapid ageing of the population, especially in the industrialized countries. In order to chase the Pension System sustainability, several countries in Europe are setting up pension reforms linking the retirement age and/or benefits to life expectancy. In this context, the accurate modelling and projection of mortality rates and life expectancy play a central role and represent issues of great interest in recent literature. Our study refers to the Italian mortality experience and considers an indexing mechanism based on the expected residual life to adjust the retirement age and keep costs at an expected budgeted level, in the spirit of sharing the longevity risk between Social Security Systems and retirees. In order to combine fitting and projections performances of selected stochastic mortality models, a model assembling technique is applied to face uncertainty in model selection, while accounting for uncertainty of estimation as well. The resulting proposal is an averaged model that is suitable to discuss about the gender gap in longevity risk and its alleged narrowing over time.

Suggested Citation

  • Mariarosaria Coppola & Maria Russolillo & Rosaria Simone, 2019. "An Indexation Mechanism for Retirement Age: Analysis of the Gender Gap," Risks, MDPI, vol. 7(1), pages 1-13, February.
    • Handle: RePEc:gam:jrisks:v:7:y:2019:i:1:p:21-:d:208252
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    2. Mercedes Ayuso & Jorge M. Bravo & Robert Holzmann & Edward Palmer, 2021. "Automatic Indexation of the Pension Age to Life Expectancy: When Policy Design Matters," Risks, MDPI, vol. 9(5), pages 1-28, May.

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