MPIDR Working Paper

Lifetime earnings and life expectancy

von Gaudecker, H.-M., Scholz, R. D.

MPIDR Working Paper WP-2006-008, 34 pages (March 2006).
Rostock, Max Planck Institute for Demographic Research

Keywords: Germany, life expectancy, pensioners, socio-economic differentials


We estimate remaining life expectancy at age 65 using a very large sample of male German pensioners. Our analysis is entirely nonparametric. Furthermore, the data enable us to compare life expectancy in eastern and western Germany conditional on a measure of socio-economic status. Our findings show a lower bound of almost fifty percent (six years) on the difference in remaining life expectancy between the lowest and the highest socio-economic group considered. Within groups, we find similar values for East and West. Our analysis contributes to the literature in several aspects. First, Germany is clearly underrepresented in differential mortality studies. Second, we are able to use a novel measure of lifetime earnings as a proxy for socio-economic status that remains valid for retired people. Third, the comparison of eastern and western Germany may provide some interesting insights for transformation countries.