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Demography

, Volume 51, Issue 5, pp 1755–1773 | Cite as

Trends in Mortality Decrease and Economic Growth

  • Geng Niu
  • Bertrand Melenberg
Article

Abstract

The vast literature on extrapolative stochastic mortality models focuses mainly on the extrapolation of past mortality trends and summarizes the trends by one or more latent factors. However, the interpretation of these trends is typically not very clear. On the other hand, explanation methods are trying to link mortality dynamics with observable factors. This serves as an intermediate step between the two methods. We perform a comprehensive analysis on the relationship between the latent trend in mortality dynamics and the trend in economic growth represented by gross domestic product (GDP). Subsequently, the Lee-Carter framework is extended through the introduction of GDP as an additional factor next to the latent factor, which provides a better fit and better interpretable forecasts.

Keywords

Longevity GDP per capita Lee-Carter model 

Notes

Acknowledgments

For comments and discussions, we thank two anonymous referees, the Editor, Makov Udi, Qihe Tang, and Jochen Mierau, as well as participants at the 7th Conference in Actuarial Science and Finance in Samos, the 2012 Tilburg University GSS seminar in Tilburg, and the 2012 Netspar Pension Day in Utrecht. We would also like to thank the Netherlands Organisation for Scientific Research (NWO) for financial support.

Supplementary material

13524_2014_328_MOESM1_ESM.pdf (684 kb)
ESM 1 (PDF 683 kb)

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Copyright information

© Population Association of America 2014

Authors and Affiliations

  1. 1.Research Institute of Economics and Management (RIEM)Southwestern University of Finance and EconomicsChengduPeople’s Republic of China
  2. 2.School of Economics and ManagementTilburg UniversityTilburgThe Netherlands
  3. 3.Network for Studies on Pensions, Aging and Retirement (NETSPAR)TilburgThe Netherlands

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