On the Heterogeneity in Longevity among Socioeconomic Groups: Scope, Trends, and Implications for Earnings-Related Pension Schemes

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On the Heterogeneity in Longevity among Socioeconomic Groups: Scope, Trends, and Implications for Earnings-Related Pension Schemes

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Abstract

Heterogeneity in longevity between socioeconomic groups is increasingly documented for developed economies and is reviewed in the paper. Heterogeneity in life expectancy disaggregated by main socioeconomic characteristics -such as age, gender, race, health, education, profession, income, and wealth -is sizable and has not declined in recent decades. The prospects for future decline are not strong, either; perhaps even to the contrary. As heterogeneity is closely linked to income or earnings (i.e., the contribution base of earnings-related retirement income programs such as social security benefits and private sector life annuities) and as heterogeneity is empirically sizable, the result is major implicit taxes for some groups -particularly the less educated and low earners -and major subsidies for other groupsparticularly highly educated individuals and high-income earners. The implications for retirement income reform and scheme design are substantial as taxes/subsidies counteract the envisaged effects of (i) a closer contribution-benefit link, (ii) a later formal retirement age to address population aging, and (iii) more individual funding and private annuities to compensate for reduced public generosity.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Robert Holzmann, Mercedes Ayuso, Jorge Miguel Bravo. 2017. "On the Heterogeneity in Longevity among Socioeconomic Groups: Scope, Trends, and Implications for Earnings-Related Pension Schemes". Global Journal of Human-Social Science - E: Economics GJHSS-E Volume 17 (GJHSS Volume 17 Issue E1).

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Journal Specifications

Crossref Journal DOI 10.17406/GJHSS

Print ISSN 0975-587X

e-ISSN 2249-460X

Keywords
Classification
GJHSS-E Classification JEL: D9
G22
H55
J13
J14
J16
Version of record

v1.2

Issue date
April 6, 2017

Language
English
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On the Heterogeneity in Longevity among Socioeconomic Groups: Scope, Trends, and Implications for Earnings-Related Pension Schemes

Robert Holzmann
Robert Holzmann Austrian Academy of Sciences
Mercedes Ayuso
Mercedes Ayuso
Jorge Bravo
Jorge Bravo