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COPYRIGHT 2004 Monash University, Centre for Population and Urban Research
Most estimates and projections of life expectancy are based on period measures. This paper presents forecasts of cohort life expectancy for older generations derived using the Lee-Carter method of forecasting mortality. These cohort measures point to more years of life expectancy than the commonly-cited current period measures. The new forecasts also indicate a more rapid increase in future life expectancy than official projections assume. Policy-makers and those planning retirement should take into account that Australians are likely to live longer than currently envisaged
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The average length of human life has roughly doubled over the last 200 years. Most of this increase took place over the last 100 years. In Australia, life expectancy at birth was 57 years in 1901-10 and increased to 80 years in 2000. During the early part of the 20th century, the greatest gains were due to reductions in mortality from infectious and parasitic diseases at young ages, while during the later part reduced mortality from chronic diseases at middle and older ages was the dominant factor. Life expectancy at age 50 increased from 25 years in 1950 to 32 years in 2000.
These unprecedented increases in human life expectancy have prompted researchers to address the issue of whether there is an upper limit to human longevity. (1) To date, there is no consensus on whether such a limit exists, what the limit might be and how soon it might be reached. (2) Certainly the increases show no signs of slowing down, (3) giving no indication that a limit might soon appear on the horizon.
For the individual, increasing longevity presents the prospect of many years of post-retirement leisure but also the possibility of spending quite lengthy periods in various states of disability and ill-health. Thus, planning for retirement and old age--both lifestyle and financial--is becoming of increasing importance. Available evidence suggests, however, that people do not plan for a lengthy retirement. (4) Moreover, studies of the assets of older Australians show that many individuals (in particular, women and those living in high-cost centres such as Sydney) are woefully ill-prepared. (5) Further, many middle-aged Australians are grappling with issues of care of elderly parents, who are living beyond popular expectation, at a time when they are also planning for their own old age. Despite the backdrop of ever-increasing years of life, for many individuals, it is as though longevity has crept up on them without warning. Indeed, many elderly people are asking in tones of weary impatience, 'How long will life go on?'
What then are the longevity prospects of people living in Australia today? In particular what are the longevity prospects of today's population aged 50 years or older--those who are planning for retirement, facing retirement or experiencing old age? This paper examines this question using probabilistic forecasting methods. It concentrates on four population cohorts defined by their age in 2001: those aged 50 (labelled baby boomers), those aged 65 (labelled current retirees), those aged 85 (labelled current old-old) and those aged 90 (labelled current oldest-old). (6) The sex- and age-specific mortality rates for these cohorts are forecast over the remainder of their lives, and there rates are used to derive cohort life expectancies. The paper demonstrates the extent to which longevity is likely to increase over the lifetime of cohorts now alive. The uncertainty in the forecasts is discussed and comparison is made with the limited information on cohort mortality available in official publications. The implications at the individual level of these forecasts of increasing longevity are discussed in relation to the baby boom and older cohorts.
COHORT VERSUS PERIOD MEASURES
The estimates of life expectancy commonly used in discussions of longevity and ageing are period or cross-sectional measures. An example of such a measure is life expectancy at birth in 2000. This measure refers to a hypothetical population of individuals who, over the course of their lifetime, experience the age-specific death rates occurring in 2000. In other words, it indicates what life expectancy at birth would be if 2000 age-specific rates were to continue for 100 years or so. The life expectancies published by the Australian Bureau of Statistics (ABS) are usually period measures, as are ABS projections of future life expectancy.
Though useful as indicators of the overall level of mortality and hence of changes over time, period measures are inappropriate for examining survival over the life course, for example the survival prospects of a particular cohort. This is because mortality rates change. For babies born in 2000, for example, the period measure provides at best an estimate of the minimum life expectancy at birth because mortality rates are expected to continue to decline as they have for the last 100 years. Similarly, the 2000 period life expectancy at a given age will underestimate the average number of years of life remaining for persons of that age in 2000.
In order to take account of life course changes in mortality, cohort measures are required. Cohort life expectancy is based on the mortality experience over the life course. The difficulty in adopting cohort measures is that the mortality experience of cohorts born after 1900, or thereabouts, is incomplete. For the baby boom cohort, for example, the mortality experience of more than 92 per cent of its members has yet to occur. In order to construct cohort life tables for living generations, therefore, forecasts of their future mortality are required.
NEW FORECASTS OF COHORT LIFE EXPECTANCY
The forecasts presented in this paper were...
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