Some helpful hints for our friends who’ve been poking fun at former Senator Alan Simpson, with an extra assist from the Social Security Administration.
What is period life expectancy? The SSA tells us:
The period life expectancy at a given age for a given year represents the average number of years of life remaining if a group of persons at that age were to experience the mortality rates for that year over the course of their remaining lives.
Then there is something called cohort life expectancy, which the SSA tracks as well:
The cohort life expectancy at a given age for a given year represents the average number of years of life remaining if a group of persons at that age were to experience the mortality rates for the series of years in which they reach each succeeding age.
Note that period life expectancy and cohort life expectancy aren’t the same thing.
I wouldn’t have considered this terribly important had I not read Charles Blahous’s work on Social Security. There is much more to say about Social Security, e.g., that the early retirement option didn’t exist in 1940 and that benefits grow at a faster rate than they did in the old days, but I will leave that to my colleagues at Economics 21, who will release a short paper on this subject later this week. For now, I recommend Blahous’s excellent Economics 21 commentary on the case for restraining the growth in benefits to affluent retirees.