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Heterogeneity in expected longevities

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  • Josep Pijoan-Mas
  • Jose-Victor Rios-Rull

Abstract

We develop a new methodology to compute differences in the expected longevity of individuals who are in different socioeconomic groups at age 50. We deal with two main problems associated with the standard use of life expectancy: that people?s socioeconomic characteristics evolve over time and that there is a time trend that reduces mortality over time. Using HRS data for individuals from different cohorts, we estimate a hazard model for survival with time-varying stochastic endogenous covariates that yields the desired expected durations. We uncover an enormous amount of heterogeneity in expected longevities between individuals in different socioeconomic groups, albeit less than implied by a naive (static) use of socioeconomic characteristics. Our analysis allows us to decompose the longevity differentials into differences in health at age 50, differences in mortality conditional on health, and differences in the evolution of health with age. Remarkably, it is the latter that is the most important for most socioeconomic characteristics. For instance, education and wealth are health protecting but have little impact on two-year mortality rates conditional on health. Finally, we document an increasing time trend of all these differentials in the period 1992?2008, and a likely increase in the socioeconomic gradient in mortality rates in the near future. The mortality differences that we find have huge welfare implications that dwarf the differences in consumption accruing to people in different socioeconomic groups.

Suggested Citation

  • Josep Pijoan-Mas & Jose-Victor Rios-Rull, 2012. "Heterogeneity in expected longevities," Staff Report 471, Federal Reserve Bank of Minneapolis.
  • Handle: RePEc:fip:fedmsr:471
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    Cited by:

    1. Guner, Nezih & Kulikova, Yuliya & Llull, Joan, 2018. "Marriage and health: Selection, protection, and assortative mating," European Economic Review, Elsevier, vol. 104(C), pages 138-166.
    2. Amengual, D.; Bueren, J.; Crego, J.A.;, 2017. "Endogenous Health Groups and Heterogeneous Dynamics of the Elderly," Health, Econometrics and Data Group (HEDG) Working Papers 17/18, HEDG, c/o Department of Economics, University of York.
    3. Julien Albertini & Xavier Fairise & Anthony Terriau, 2020. "Health, wealth, and informality over the life cycle," Working Papers halshs-02447426, HAL.
    4. Janet Currie & Hannes Schwandt & Josselin Thuilliez, 2020. "Pauvreté, Egalité, Mortalité: mortality (in)equality in France and the United States," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 197-231, January.
    5. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2017. "The gender gap in mortality: How much is explained by behavior?," Journal of Health Economics, Elsevier, vol. 54(C), pages 79-90.
    6. Carl-Johan Dalgaard & Holger Strulik, 2017. "The Genesis of the Golden Age: Accounting for the Rise in Health and Leisure," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 132-151, March.
    7. Ana Hidalgo-Cabrillana & Zoë Kuehn & Cristina Lopez-Mayan, 2017. "Development accounting using PIAAC data," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(4), pages 373-399, November.
    8. Pilar Zueras & Roberta Rutigliano & Sergi Trias-Llimós, 2020. "Marital status, living arrangements, and mortality in middle and older age in Europe," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 65(5), pages 627-636, June.
    9. Nawid Siassi, 2019. "Inequality and the Marriage Gap," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 160-181, January.
    10. Miller, Ray & Bairoliya, Neha & Canning, David, 2019. "Health disparities and the socioeconomic gradient in elderly life-cycle consumption," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    11. Guner, Nezih & Kulikova, Yuliya & Llull, Joan, 2018. "Reprint of: Marriage and health: Selection, protection, and assortative mating," European Economic Review, Elsevier, vol. 109(C), pages 162-190.
    12. Di Pietro, Giorgio, 2018. "Revisiting the impact of macroeconomic conditions on health behaviours," Economics & Human Biology, Elsevier, vol. 28(C), pages 173-181.
    13. Cozzi, Guido & Francesconi, Marco & Lundberg, Shelly & Mantovan, Noemi & Sauer, Robert M., 2018. "Advancing the economics of gender: New insights and a roadmap for the future," European Economic Review, Elsevier, vol. 109(C), pages 1-8.
    14. James M. Poterba, 2014. "Retirement Security in an Aging Society," NBER Working Papers 19930, National Bureau of Economic Research, Inc.
    15. Johannes Schuenemann & Holger Strulik & Timo Trimborn, 2020. "The Marriage Gap: Optimal Aging and Death in Partnerships," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 36, pages 158-176, April.
    16. Pilar Zueras & Roberta Rutigliano & Sergi Trias-Llimós, 0. "Marital status, living arrangements, and mortality in middle and older age in Europe," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 0, pages 1-10.
    17. Laun, Tobias & Markussen, Simen & Vigtel, Trond Christian & Wallenius, Johanna, 2019. "Health, longevity and retirement reform," Journal of Economic Dynamics and Control, Elsevier, vol. 103(C), pages 123-157.
    18. Laun, Tobias & Markussen, Simen & Vigtel, Trond Christian & Wallenius, Johanna, 2018. "Health, Longevity and Pension Reform," Working Paper Series 2018:9, Uppsala University, Department of Economics.

    More about this item

    Keywords

    Life expectancy;

    JEL classification:

    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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