Life Expectancy Changes and Their Consequences for Pension System in Finland and the Czech Republic

Abstract

Finland and the Czech Republic are among the countries where population ageing has been the most pronounced in the last decade. The aim of the paper is to describe future development of life expectancy in the context of pension system reforms that are currently prepared by the politicians in analysed countries. One-year age-and-sex-specific mortality rates for population aged 0 to 100+ were taken from the Human Mortality Database for 1950–2021 and projected to 2050. Three stochastic models were calculated in R and compared. Suitable was Lee-Carter model modified by Li-Lee-Gerland (with rotation of bx parameter) because of low infant mortality in both populations. Projected year-on-year change of life expectancy was comparable to the Eurostat, but absolute values were too optimistic in our case. Values of temporary life expectancy between 60 and 70 years and indices of annual relative changes revealed relatively fast pace of increase in life expectancy in both populations which the pension systems should také into account.