Differences in Life Expectancy Between Self-Employed Workers and Paid Employees when Retirement Pensioners: Evidence from Spanish Social Security Records

The aim of this paper is to examine differences in life expectancy (LE) between self-employed (SE) and paid employee (PE) workers when they become retirement pensioners, looking at levels of pension income using administrative data from Spanish social security records. We draw on the Continuous Sample of Working Lives (CSWL) to quantify changes in total life expectancy at age 65 (LE65) among retired men over the longest possible period covered by this data source: 2005–2018. These changes are broken down by pension regime and initial pension income level for three periods. The literature presents mixed evidence, even for the same country–for Japan and Italy, for example–with some studies pointing to higher life expectancy for SE than for PE retirement pensioners while others argue the opposite. In Spain, LE65 is slightly higher for the SE than for PE workers when retirement pensioners. For 2005–2010, a gap in life expectancy of 0.23 years between SE and PE retirement pensioners is observed. This widens to 0.55 years for 2014–2018. A similar trend can be seen if pension income groups are considered. For 2005–2010, the gap in LE65 between pensioners in the lowest and highest income groups is 1.20 years. This widens over time and reaches 1.51 years for 2014–2018. Although these differences are relatively small, they are statistically significant. According to our research, the implications for policy on social security are evident: differences in life expectancy by socioeconomic status and pension regime should be taken into account for a variety of issues involving social security schemes. These include establishing the age of eligibility for retirement pensions and early access to benefits, computing the annuity factors used to determine initial retirement benefits and valuing the liabilities taken on for retirement pensioners.