Who can predict their own Demise? Accuracy of Longevity Expectations by Education and Cognition

Arbeitspapier

Biased longevity expectations will lead to suboptimal decisions regarding saving, retirement, annuitization and health, with consequences for wellbeing in old age. Systematic differences in the accuracy of longevity expectations may partly explain heterogeneity in economic behaviour by education and cognitive functioning. Analysis of eight waves of the US Health and Retirement Study reveals that individuals with lower levels of education and cognitive functioning report survival probabilities that are less accurate in predicting their in-sample mortality. There is little evidence that the gradients in the veracity of expectations are due to the less educated and cognitively able responding less to changes in objective mortality risks. However, high school dropouts and the least cognitively able report survival probabilities that are less stable and display greater un explained variability. These disadvantaged groups appear to be less confident in their longevity beliefs, which is justified given that their expectations are less accurate.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 15-052/V

Classification and Topics

• Classification: Wirtschaft ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Expectations; Speculations ; Health Behavior ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
• Subject: Expectations ; Mortality ; Health ; Cognition ; Education

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bago d'Uva, Teresa ; Erdogan Ciftci, Esen ; O'Donnell, Owen ; van Doorslaer, Eddy
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/111736
• Last update: 10.03.2025, 11:42 AM CET