Aging & Social Change: Eleventh Interdisciplinary Conference

Abstract

Advances in medical knowledge and technology have helped to raise both general and healthy life expectancy (HLE), causing a secular upturn in the share of the elderly population and challenging PAYGO systems of Social Insurance (SI) by increasing their default risk. Analyzing the determinants of self-perceived health (SPH) by use of the SHARE longitudinal multi-country database, combined with data on life expectancy and its healthy part, from EUROSTAT, and where missing, from WHO, we find that past and present employment improves health while the gender effect of job quality on SPH is detrimental for women and positive for men. We found that job precarity is particularly widespread among women and that its negative effect on health rises with age, whereas job quality among men is mainly positive and peaks in the mid-fifties. This empirical result has an important implication for the policy of automatically linking retirement age to healthy life expectancy: We argue that it justifies progressive reduction of the linkage, certainly for women, with increasing age. One way to achieve this is to attach weights to the existing and the linked retirement age—a weight increasing with age to the existing RA and a complementarily falling weight with age to the linked RA. This would obviate the front-loading of the linkage of RA to healthy life expectancy as occurs in current typical discretionary RA policies. We conclude that SI sustainability should be linked to healthy LE rather than to general LE.