On the evolution of the gender gap in life expectancy at normal retirement age for OECD countries

Abstract

Abstract Population aging is evolving at different rates across countries and over time, and it represents a long-term challenge for both the sustainability of pension schemes and for the realization of public intergenerational transfers. In this context, this work focuses on gender differences in survival at older ages. Specifically, we implement a comparative analysis of OECD countries to assess the adequacy of the corresponding gender-specific normal retirement age when faced with growing life expectancy. The analysis hinges on several graphical representations and is motivated by recent findings on Italian longevity to determine optimal retirement age shifts necessary to match growing life expectancy at older ages while accounting for model risk for mortality projections. Our analysis determines—at the country level—the extent to which adjustments to the normal retirement age are advisable for the sustainability of the intergenerational paradigm for pensions. The study considers males and females separately because most of these countries are characterized by aging societies where men and women have different crucial characteristics, including life expectancy. It is therefore important that policymakers have information on the future evolution of the longevity gender gap so they will be able to apply policies that preserve the principles of equality and solidarity and reduce the pension gender gap. We find groups of countries where gender gap in life expectancy follows the same dynamics.

Keywords

• Longevity risk
• Life expectancy
• Indexed pension system
• Model risk
• Gender gap