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

Trends in Mortality Decrease and Economic Growth

  • Geng Niu
  • Bertrand Melenberg


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.


Longevity GDP per capita Lee-Carter model 



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)


  1. Acemoglu, D., & Johnson, S. (2007). Disease and development: The effect of life expectancy on economic growth. Journal of Political Economy, 115, 925–985.CrossRefGoogle Scholar
  2. Ahn, S. K., & Reinsel, G. C. (1990). Estimation for partially nonstationary nultivariate autoregressive models. Journal of the American Statistical Association, 85, 813–823.CrossRefGoogle Scholar
  3. Bhargava, A., Jamison, D. T., Lau, L. J., & Murray, C. J. (2001). Modeling the effects of health on economic growth. Journal of Health Economics, 20, 423–440.CrossRefGoogle Scholar
  4. Birchenall, J. (2007). Economic development and the escape from high mortality. World Development, 35, 543–568.CrossRefGoogle Scholar
  5. Bloom, B. E., Canning, D., & Sevilla, J. (2004). The effect of health on economic growth: a production function approach. World Development, 32, 1–13.CrossRefGoogle Scholar
  6. Bolt, J., & van Zanden, J. L. (2013). The first update of the Maddison Project: Re-estimating growth before 1820 (Maddison-Project Working Paper 4). Retrieved from
  7. Booth, H., & Tickle, L. (2008). Mortality modelling and forecasting: A review of methods. Annals of Actuarial Science, 3, 3–43.CrossRefGoogle Scholar
  8. Booth, H., Maindonald, J., & Smith, L. (2002). Applying Lee-Carter under conditions of variable mortality decline. Population Studies, 56, 325–336.CrossRefGoogle Scholar
  9. Brenner, M. H. (2005). Commentary: Economic growth is the basis of mortality rate decline in the 20th century: Experience of the United States 1901–2000. International Journal of Epidemiology, 34, 1214–1221.CrossRefGoogle Scholar
  10. Brouhns, N., Denuit, M., & Vermunt, J. K. (2002). A Poisson log-bilinear regression approach to the construction of projected lifetables. Insurance Mathematics and Economics, 31, 373–393.CrossRefGoogle Scholar
  11. Cairns, A., Black, D., & Dowd, K. (2006). A two-factor model for stochastic mortality with parameter uncertainty: Theory and calibration. Journal of Risk and Insurance, 73, 687–718.CrossRefGoogle Scholar
  12. Currie, I. D., Durban, M., & Eilers, P. (2004). Smoothing and forecasting mortality rates. Statistical Modelling, 4, 279–298.CrossRefGoogle Scholar
  13. De la Croix, D., & Licandro, O. (1999). Life expectancy and endogenous growth. Economics Letters, 65, 255–263.CrossRefGoogle Scholar
  14. Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica, 55, 251–276.CrossRefGoogle Scholar
  15. Ettner, S. L. (1996). New evidence on the relationship between income and health. Journal of Health Economics, 15, 67–85.CrossRefGoogle Scholar
  16. Hanewald, K. (2011). Explaining mortality dynamics: The role of macroeconomic fluctuations and cause of death trends. North American Actuarial Journal, 15, 290–314.CrossRefGoogle Scholar
  17. Human Mortality Database. (n.d.). Berkeley and Rostock, Germany: University of California, Berkeley, and Max Planck Institute for Demographic Research. Retrieved from or
  18. Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12, 231–254.CrossRefGoogle Scholar
  19. Kwiatkowski, D., Phillips, P., Schmidt, P., & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? Journal of Econometrics, 54, 159–178.CrossRefGoogle Scholar
  20. Lee, R. D., & Carter, L. R. (1992). Modeling and forecasting U.S. mortality. Journal of the American Statistical Association, 87, 659–671.Google Scholar
  21. Lee, R. D., & Miller, T. (2001). Evaluating the performance of the Lee-Carter method for forecasting mortality. Demography, 38, 537–549.CrossRefGoogle Scholar
  22. Nandi, A., Prescott, M., Cerdá, M., Vlahov, D., Tardiff, K., & Galea, S. (2012). Economic conditions and suicide rates in New York City. American Journal of Epidemiology, 175, 527–535.CrossRefGoogle Scholar
  23. Nielsen, B., & Nielsen, J. (2010, December 8). Identification and forecasting in the Lee-Carter model (Working paper). Retrieved from
  24. O’Hare, C., & Li, Y. (2012). Explaining young mortality. Insurance Mathematics and Economics, 50, 12–25.CrossRefGoogle Scholar
  25. Perron, P. (1988). Trends and random walks in macroeconomic time series: further evidence from a new approach. Journal of Economic Dynamics and Control, 12, 297–332.CrossRefGoogle Scholar
  26. Pitacco, E., Denuit, M., Haberman, S., & Olivieri, A. (2009). Modelling longevity dynamics for pensions and annuity business. Oxford, UK: Oxford University Press.Google Scholar
  27. Plat, R. (2009). On stochastic mortality modeling. Insurance Mathematics and Economics, 45, 393–404.CrossRefGoogle Scholar
  28. Pritchett, L., & Summers, L. (1996). Wealthier is healthier. Journal of Human Resources, 31, 841–868.CrossRefGoogle Scholar
  29. Swift, R. (2011). The relationship between health and GDP in OECD countries in the very long run. Health Economics, 20, 306–322.CrossRefGoogle Scholar
  30. Wilmoth, J. (1993). Computational methods for fitting and extrapolating the Lee-Carter model of mortality change (Technical report). Berkeley: Department of Demography, University of California.Google Scholar

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

Personalised recommendations