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Potential support ratios: Cohort versus period perspectives

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The ‘prospective potential support ratio’ has been proposed by researchers as a measure that accurately quantifies the burden of ageing, by identifying the fraction of a population that has passed a certain measure of longevity, for example, 17 years of life expectancy. Nevertheless, the prospective potential support ratio usually focuses on the current mortality schedule, or period life expectancy. Instead, in this paper we look at the actual mortality experienced by cohorts in a population, using cohort life tables. We analyse differences between the two perspectives using mortality models, historical data, and forecasted data. Cohort life expectancy takes future mortality improvements into account, unlike period life expectancy, leading to a higher prospective potential support ratio. Our results indicate that using cohort instead of period life expectancy returns around 0.5 extra younger people per older person among the analysed countries. We discuss the policy implications implied by our cohort measures.
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Keywords: cohort mortality; life expectancy; longevity risk; potential support ratio; retirement age

Document Type: Research Article

Affiliations: University of Southern Denmark,

Publication date: May 4, 2017

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