Life expectancy inequalities and their evolution in Italy. How these impact on the equity of the pension system?

Abstract

Abstract The article aims to present the most recent evidence on the life-expectancy differentials across socio-economic groups in Italy and discuss their implications in terms of equity and fairness of the pension systems. In fact, Italian pension rules are set according to average life expectancy, ignoring the shorter life expectancy at retirement observed in more disadvantaged socioeconomic groups, as well as in many occupations and economic sectors. This produces unintended consequences in terms of redistribution, which reinforce and exacerbate inequalities present in the labour market. This article will present updated evidence on the evolution of life expectancy inequalities across job titles, sectors and occupational class in Italy to assess whether the social gap, already highlighted by previous scholars, has been widening or narrowing. Only a few studies are available in the literature on this subject, almost exclusively from the US, which suggest that the gap in terms of life expectancy at ages approaching retirement is increasing, mainly driven by a faster improvement in longevity across most advantaged groups. It is crucial to examine the trend in a country like Italy where retirement age has been strongly tightened and linked automatically to average life expectancy in the population. These results may be important in order to inform the public debate about future reforms on retirement rules and in particular for the definition of the so called “arduous and hazardous jobs” (in Italian: lavori gravosi), that could be exempted from the postponement of pension age. In order to estimate life expectancy differentials among different occupations, three of the largest Italian longitudinal studies will be used: the Turin Longitudinal Study (SLT), the Italian Longitudinal Study (SLI) and WHIP-Health Study, all studies where it is possible to conduct mortality follow-up through administrative record linkage with archives of mortality of large cohorts until recent years.