Wealth and the effect of subjective survival probability

  • Sanna NivakoskiEmail author
Original Paper


The life cycle hypothesis predicts that a longer life expectancy should, ceteris paribus, lead to the accumulation of more wealth during a working life to fund consumption in retirement. The prediction is tested by examining whether subjective survival probability (SSP)—a proxy measure of self-assessed life expectancy—affects retirement wealth among the pre-retirement older population in Ireland. The estimated relationship is complicated due to the correlation between SSP and life table estimates of life expectancy. SSP is instrumented to address measurement error and reverse causality. The findings suggest that a higher SSP increases retirement wealth.


Financial wealth Pension wealth Life cycle hypothesis Longevity Subjective survival probability Retirement savings 

JEL Classification

D14 D84 D91 



I would like to thank Alan Barrett, Gaia Narciso, Rob Alessie, Alessandro Cigno, Madeline Zavodny, seminar participants at TCD, TILDA, NERI, IEA, SMYE, the Geary Institute and the Royal Economic Society Postgraduate Meeting as well as the two anonymous referees for helpful comments and suggestions. I would like to thank TILDA study participants and research team. I am grateful to TILDA for access to the data used in the paper. TILDA is funded by the Department of Health, Irish Life and The Atlantic Philanthropies. TILDA data are available from the Irish Social Science Data Archive (, Gateway to Global Aging (, and Interuniversity Consortium for Political and Social Research ( All errors are my own.

Funding information

This study was funded by a Government of Ireland Postgraduate Scholarship.

Compliance with ethical standards

Conflict of interest

The author declares that there is no conflict of interest.


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.University College DublinDublin 4Ireland

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