Occupation-Based Life Expectancy: Actuarial Fairness in Determining Statutory Retirement Age.

Dorly J.H Deeg,Sascha De Breij,Wouter De Tavernier

doi:10.3389/fsoc.2021.675618

Abstract

This study examines occupation-based differences in life expectancy and the extent to which health accounts for these differences. Twentyseven-year survival follow-up data were used from the Dutch population-based Longitudinal Aging Study Amsterdam (n = 2,531), initial ages 55–85 years. Occupation was based on longest-held job. Results show that the non-skilled general, technical and transport domains had an up to 3.5-year shorter life expectancy than the academic professions, accounting for the compositional characteristics age and gender. Statutory retirement age could be made to vary accordingly, by allowing a proportionally greater pension build-up in the shorter-lived domains. Health accounted for a substantial portion of the longevity difference, ranging from 20 to 66%, depending on the health indicator. Thus, health differences between occupational domains today can be used as a means to tailor retirement ages to individuals’ risks of longevity. These data provide a proof of principle for the development of an actuarially fair method to determine statutory retirement ages.

Highlights

Actuarial fairness is considered a key aspect of a just pension system (Schokkaert and Van Parijs, 2003; De Tavernier, 2021) and can be understood as “equal treatment for equal risks” (Landes, 2015, p. 521)
333 participants currently had a paid job, whereas 2,198 had no current job but had held a job earlier in life. 76 participants had moved from their longest-held job to their current job, 71 of which currently worked in a different occupational domain
We found for four of our five health indicators which are presumably retrievable from registries, that they explained a substantial portion of the association of domain with longevity

Summary

Introduction

Actuarial fairness is considered a key aspect of a just pension system (Schokkaert and Van Parijs, 2003; De Tavernier, 2021) and can be understood as “equal treatment for equal risks” (Landes, 2015, p. 521). Actuarial fairness is considered a key aspect of a just pension system (Schokkaert and Van Parijs, 2003; De Tavernier, 2021) and can be understood as “equal treatment for equal risks” Expected benefits are directly linked to the expected duration of time during which they will be enjoyed, i.e., the individual’s life expectancy. It is well-known, that life expectancy is strongly socially stratified (Kunst and Mackenbach, 1994). Equal treatment through a uniform statutory retirement age does not do justice to the socially highly unequally distributed life opportunities and is not actuarially fair (Unger and Schulze, 2013). This study proposes a mechanism through which this could be achieved

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Discussion

Conclusion