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Longevity forecasting by socio‐economic groups using compositional data analysis
Author(s) -
Kjærgaard S⊘ren,
Ergemen Yunus Emre,
BergeronBoucher MariePier,
Oeppen Jim,
KallestrupLamb Malene
Publication year - 2020
Publication title -
journal of the royal statistical society: series a (statistics in society)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.103
H-Index - 84
eISSN - 1467-985X
pISSN - 0964-1998
DOI - 10.1111/rssa.12555
Subject(s) - life expectancy , pension , longevity , statutory law , retirement age , economics , demographic economics , population , expectancy theory , age groups , demography , gerontology , political science , sociology , medicine , management , finance , law
Summary Several Organisation for Economic Co‐operation and Development countries have recently implemented an automatic link between the statutory retirement age and life expectancy for the total population to ensure sustainability in their pension systems due to increasing life expectancy. As significant mortality differentials are observed across socio‐economic groups, future changes in these differentials will determine whether some socio‐economic groups drive increases in the retirement age, leaving other groups with fewer pensionable years. We forecast life expectancy by socio‐economic groups and compare the forecast performance of competing models by using Danish mortality data and find that the most accurate model assumes a common mortality trend. Life expectancy forecasts are used to analyse the consequences of a pension system where the statutory retirement age is increased when total life expectancy is increasing.