Category: Demographics

Mortality and the provision of retirement income

Mary Pat Campbell

Link: https://www.oecd.org/daf/fin/private-pensions/launch-publication-mortality-provision-retirement.htm

Graphic:

Video:

Excerpt:

The report analyses the development of mortality assumptions to build mortality tables to better protect retirement income provision. It first provides an international overview of longevity trends and drivers over the last several decades, including the impact of the COVID-19 pandemic. It then explores considerations and traditional approaches for developing mortality tables, and details the standard mortality tables developed across OECD member countries. It concludes with guidelines to assist regulators and supervisors in assessing whether the mortality assumptions and tables used in the context of retirement income provision are appropriate.

The OECD will provide an overview of the publication, followed by a roundtable discussion with government and industry stakeholders. Topics discussed will include:

  • Recent mortality trends and drivers
  • How mortality trends/drivers can inform future expectations, and how to account for that in modelling
  • The challenge of accounting for COVID in setting mortality assumptions
  • Trade-offs for different modelling approaches
  • The usefulness of the guidelines included in the report in practice
  • How to better communicate around mortality assumptions to non-experts

Publication Date: 2 Feb 2023

Publication Site: OECD

You Might Live Longer Than You Think. Your Finances Might Not.

Mary Pat Campbell

Link: https://www.wsj.com/articles/death-finances-and-how-many-of-us-get-our-money-needs-wrong-51a660a2?st=latmuov31yafzz9&reflink=desktopwebshare_permalink

Graphic:

Excerpt:

Demographers and actuaries make the following distinction between life expectancy and longevity: Life expectancy refers to the average number of years someone will live from a given age, whereas longevity refers to how long he or she might live if everything goes well, typically expressed as the probability of living beyond a certain age such as 85, 90 or even 100.

A growing body of evidence shows that many people are ignorant of their so-called longevity risk—the probability of living a very long time—and the complications that presents. 

….

Drs. Hurwitz and Mitchell note that retirement calculators provide information about average life expectancy, but not longevity. They have found that about five times as many Census Bureau publications relate to life expectancy as longevity. Thus, people who have planned appropriately for their life expectancy might miss how likely they are to live longer. 

….

People can look up their longevity risk with an online Longevity Illustrator maintained by the American Academy of Actuaries and Society of Actuaries, based off the latest mortality data from the Social Security Administration. 

Author(s): Josh Zumbrun

Publication Date: 10 Feb 2023

Publication Site: WSJ

Years of life lost to COVID-19 in 81 countries

Mary Pat Campbell

Link: https://www.nature.com/articles/s41598-021-83040-3

Graphic:

Abstract:

Understanding the mortality impact of COVID-19 requires not only counting the dead, but analyzing how premature the deaths are. We calculate years of life lost (YLL) across 81 countries due to COVID-19 attributable deaths, and also conduct an analysis based on estimated excess deaths. We find that over 20.5 million years of life have been lost to COVID-19 globally. As of January 6, 2021, YLL in heavily affected countries are 2–9 times the average seasonal influenza; three quarters of the YLL result from deaths in ages below 75 and almost a third from deaths below 55; and men have lost 45% more life years than women. The results confirm the large mortality impact of COVID-19 among the elderly. They also call for heightened awareness in devising policies that protect vulnerable demographics losing the largest number of life-years.

Author(s): Héctor Pifarré i Arolas, Enrique Acosta, Guillem López-Casasnovas, Adeline Lo, Catia Nicodemo, Tim Riffe & Mikko Myrskylä

Publication Date: 18 Feb 2021

Publication Site: nature scientific reports

Flash Update: Unemployment Rate in Every Metro (Feb 2023 Release)

Mary Pat Campbell

Link: https://civmetrics.com/uncategorized/flash-update-unemployment-rate-in-every-metro-feb-23-release/

Graphic:

Excerpt:

The new metro-level unemployment numbers were released last week, and we’ve organized all the data for all 380+ metros in one chart at the bottom of this page. First, some highlights:

NOTE: All numbers are seasonally adjusted.

Here are the 10 metro areas that saw the biggest month-over-month increase in unemployment:

Author(s): Ted Ballantine

Publication Date: 6 Feb 2023

Publication Site: CivMetrics

Employment of “People with a Disability” Spiked to Record in Hot Labor Market. Applications for Disability Benefits Fell to 20-Year Low

Mary Pat Campbell

Link: https://wolfstreet.com/2023/02/03/employment-of-people-with-a-disability-spiked-to-record-in-hot-labor-market-applications-for-disability-benefits-fell-to-20-year-low/

Graphic:

Excerpt:

The number of people with a disability who were employed in January spiked by 27% from January 2020, to 7.29 million in January — with December at 7.37 million having been the highest in the data from the BLS going back to 2008:

Author(s): Wolf Richter

Publication Date: 3 Feb 2023

Publication Site: Wolf Street

Data Challenges in Building a Facial Recognition Model and How to Mitigate Them

Mary Pat Campbell

Link: https://www.soa.org/resources/research-reports/2023/data-facial-rec/

PDF: https://www.soa.org/49022b/globalassets/assets/files/resources/research-report/2023/dei107-facial-recognition-challenges.pdf

Graphic:

Excerpt:

This paper is an introduction to AI technology designed for actuaries to understand how the technology works, the potential risks it could introduce, and how to mitigate risks. The author focuses on data bias as it is one of the main concerns of facial recognition technology. This research project was jointly sponsored by the Diversity Equity and Inclusion Research and the Actuarial Innovation and Technology Strategic Research Programs

Author(s): Victoria Zhang, FSA, FCIA

Publication Date: Jan 2023

Publication Site: SOA Research Institute

France Won’t Accept Emmanuel Macron’s Attack on Pensions

Mary Pat Campbell

Link: https://jacobin.com/2023/02/france-emmanuel-macron-pension-reform-protest-strike-welfare

Excerpt:

According to police figures, Tuesday’s nationwide protests marked the largest single-day union-backed demonstration in France in thirty years. Some 1.272 million turned out to the streets. That’s more than the already-impressive January 19 turnout, it’s more than any of the single-day peaks of the 2010 and 2003 movements over retirement reforms — it even topped the height of the legendary 1995 protests.

And there’s more to come. The united union coalition has called for two further days of strikes and protest: Tuesday, February 7, and Saturday, February 11. “Until then,” the coalition has also called on the public to “multiply actions, initiatives, meetings, and general assemblies across the country, in workplaces [and] at places of study, including through strikes.”

After two successful national mobilizations, the movement seems to be entering a new phase. Public opinion is clearly on its side — and yet, the government isn’t budging on the proposed hike in the retirement eligibility age from sixty-two to sixty-four. Clearly, it’s going to take more for organized labor to win this battle.

….

Clearly, the strike calls over pension reform have resonated beyond organized labor’s traditional bastions of support in the public sector: namely, schools, health services, and transit networks (the national SNCF rail company and the Paris metro network). Workers in all these sectors have walked off the jobs, but so have others in the private sector. The General Confederation of Labour (CGT) has shared a list of strikes on January 31 that illustrates this point: five thousand strikers at Airbus; a walkout from 90 percent of the staff at a FNAC department store outside of Toulouse; a strike from 80 percent of the workers at a LU Mondelēz factory in Normandy, etc.

Author(s): Cole Stangler

Publication Date: 2 Feb 2023

Publication Site: Jacobin

Unemployment Rate Hits New Low of 3.4 Percent as Jobs and Employment Jump But…

Mary Pat Campbell

Link: https://mishtalk.com/economics/unemployment-rate-hits-new-low-of-3-4-percent-as-jobs-and-employment-jump-but

Graphic:

Excerpt:

If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.

Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.

These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.

Q&A What’s Going On?

Q: Hey Mish, What’s Going On?
A: People are taking on second part time jobs to make ends meet. But full time employment is stagnant no matter how one slices and dices the revisions. 

Author(s): Mike Shedlock

Publication Date: 3 Feb 2023

Publication Site: Mish Talk

Why the French are protesting against pension reform

Mary Pat Campbell

Link: https://www.dw.com/en/france-pension-reform-plans-trigger-public-backlash/a-64513082

Excerpt:

A reform of France’s pension system is set to push up the minimum retirement age from 62 to 64. The government has said the measures are needed. But most French, and even a number of economists, disagree.

The demonstration on a recent Thursday afternoon could be a bad omen for President Emmanuel Macron. About 80,000 people gathered in Paris, and over 1 million across France — more than at any other French protest in over a decade. They were there to show their opposition to the government’s pension reform plans, which even some economists disapprove of.

Protesters in the street leading from Place de la Republique to Place de la Bastille in northeastern Paris were holding up placards saying things like “I love my pension” and “This [reform] is not inevitable, it does not create social justice.”

….

But the government has said the reforms are necessary to save France’s pay-as-you-go system, where workers pay for pensions through their levies. “The ratio of workers to pensioners is going down and that is threatening our system. With this project, we’ll guarantee the future of our retirement model,” Prime Minister Elisabeth Borne said before the Senate in mid-January.

As opposed to certain other European countries, France’s pension system does not include any capital-funded elements. It comprises general branches for private employees and public servants, and 27 so-called special pension schemes for, for example, ballet dancers or police officers that benefit from an earlier retirement.

The government now aims to increase the system’s overall minimum retirement age from 62 to 64 years by 2030. And from 2027 on, people will need to work for 43 years — instead of the current 42 — to receive a full-rate pension.

Macron’s plans would maintain an earlier retirement for people who started working at a young age and preserve certain special pension schemes. Others, such as the plans for metro drivers in Paris, are to be cut. The government also aims to increase the minimum pension by about €100 ($108) to €1,200 per month.

Money is, of course, Macron’s main argument. The reform is based on a report by a government-mandated expert committee that predicts pension payments will amount to up to 14.7% of GDP in 2032, instead of the current 13.8%.

Author(s): Lisa Louis

Publication Date: 30 Jan 2023

Publication Site: DW

Japan PM says country on the brink over falling birth rate

Mary Pat Campbell

Link: https://www.bbc.com/news/world-asia-64373950

Excerpt:

Japan’s prime minister says his country is on the brink of not being able to function as a society because of its falling birth rate.

Fumio Kishida said it was a case of “now or never.”

Japan – population 125 million – is estimated to have had fewer than 800,000 births last year. In the 1970s, that figure was more than two million.

Birth rates are slowing in many countries, including Japan’s neighbours.

But the issue is particularly acute in Japan as life expectancy has risen in recent decades, meaning there are a growing number of older people, and a declining numbers of workers to support them.

Japan now has the world’s second-highest proportion of people aged 65 and over – about 28% – after the tiny state of Monaco, according to World Bank data.

Author(s): George Wright

Publication Date: 23 Jan 2023

Publication Site: BBC

China’s population falls for first time since 1961

Mary Pat Campbell

Link: https://www.bbc.com/news/world-asia-china-64300190

Graphic:

Excerpt:

China’s population has fallen for the first time in 60 years, with the national birth rate hitting a record low – 6.77 births per 1,000 people.

The population in 2022 – 1.4118 billion – fell by 850,000 from 2021.

China’s birth rate has been declining for years, prompting a slew of policies to try to slow the trend.

But seven years after scrapping the one-child policy, it has entered what one official described as an “era of negative population growth”.

The birth rate in 2022 was also down from 7.52 in 2021, according to China’s National Bureau of Statistics, which released the figures on Tuesday.

In comparison, in 2021, the United States recorded 11.06 births per 1,000 people, and the United Kingdom, 10.08 births. The birth rate for the same year in India, which is poised to overtake China as the world’s most populous country, was 16.42.

Deaths also outnumbered births for the first time last year in China. The country logged its highest death rate since 1976 – 7.37 deaths per 1,000 people, up from 7.18 the previous year.

Author(s): Kelly Ng

Publication Date: 17 Jan 2023

Publication Site: BBC

Monopsony in Professional Labor Markets: Hospital System Concentration and Nurse Wage Growth

Mary Pat Campbell

Link: https://www.ineteconomics.org/perspectives/blog/monopsony-in-professional-labor-markets-hospital-system-concentration-and-nurse-wage-growth

Graphic:

PDF of working paper: https://www.ineteconomics.org/uploads/papers/WP_197-Allegretto-HospCons.pdf

Excerpt:

Rolling waves of consolidation have significantly decreased the number of hospital systems in the U.S., leading to dominant regional systems. Increased concentration potentially affects industry quality, prices, efficiency, wages, and more. Much of the consolidation research is focused on merger events and estimating effects on the merged entities. In contrast, our new working paper is not based simply on merger data but takes account of the overall increase in consolidation across the country without respect to cause.

Specifically, we use the intensity of changes in hospital system consolidation in metropolitan statistical areas (MSAs) over two periods to estimate its effect on the wage growth of higher-earning professional workers—in this case registered nurses. We focus on registered nurses as a homogeneous group of workers with some degree of industry-specific education and skills. Registered nurses represent the largest single occupational classification in hospitals and urgent care centers, representing one in four workers.

Understanding the dynamics of local healthcare labor markets is critical given the importance of the sector for the U.S. economy; even more so in the wake of the pandemic amid continued uncertainty around long-term effects (e.g., early retirements, career shifts, education delays). Moreover, labor shortages among hospital-based nurses, which may be a symptom of monopsony, have been endemic in the industry for many years. The wages of nurses were stagnant between 1995 and 2015 despite increasing demand for healthcare over the same timeframe even as it was the only sector that added employment during the Great Recession. Explanations for the stagnation of nurse wages—in one of the more highly unionized professional occupations in the country—are not readily apparent.

Author(s): Sylvia Allegretto and Dave Graham-Squire

Publication Date: 19 Jan 2023

Publication Site: Institute for New Economic Thinking