Adjusting government policies for age inflation
National Bureau of Economic Research, 2008 - Medical - 29 pages
Government policies that are based on age do not adjust to the fact that a given age is associated with a higher remaining life expectancy and lower mortality risk relative to earlier time periods due to improvements in mortality. We examine four possible methods for adjusting the eligibility ages for Social Security, Medicare, and Individual Retirement Accounts to determine what eligibility ages would be today and in 2050 if adjustments for mortality improvement were taken into account. We find that historical adjustment of eligibility ages for age inflation would have increased ages of eligibility by approximately 0.15 years annually. Failure to adjust for mortality improvement implies the percent of the population eligible to receive full Social Security benefits and Medicare will increase substantially relative to the share eligible under a policy of age adjustment.
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2004 Method Male active life expectancies Adjust for Age adjusted age Adjusting Government Policies age adjustment Age Inflation Starting ages of eligibility based on mortality Black Female White Black Male White Black White Black Delayed Retirement Credits disability-free life expectancies Expectancy measured female in 2004 Female Male Female Female White Female Gopi Shah Goda Human Mortality Database improvement among women improvements in mortality Individual Retirement Accounts IRA Maximum IRA Minimum Withdrawal Kenneth G legislation lower mortality risk Male Black Female Male Female Male Male Female Total Male White Male Manton measured at birth measures of age Method Black White Method Male Female Minimum Withdrawal Age mortality improvement mortality rates Mortality-Adjusted Ages mortality-equivalent ages NBER Normal Retirement Age November 29 PENNSYLVANIA STATE UNIVERSITY percent period life tables Policies for Age real ages remaining life expectancy Social Security Act Social Security Administration subscriptions White Black Male White Male Black