Forecasting life expectancy and mortality forms an important subdivision of demography. Future trends in life expectancy have huge implications for old-age support programs like Social Security and pension systems, because the cash flow in these systems depends on the number of recipients still living (along with the rate of return on the investments or the tax rate in PAYGO systems). With longer life expectancies, these systems see increased cash outflow; if these systems underestimate increases in life-expectancies, they won't be prepared for the large payments that will inevitably occur as humans live longer and longer.
Life expectancy forecasting usually is based on two different approaches:
Forecasting life expectancy and mortality forms an important subdivision of demography. Future trends in life expectancy have huge implications for old-age support programs like Social Security and pension systems, because the cash flow in these systems depends on the number of recipients still living (along with the rate of return on the investments or the tax rate in PAYGO systems). With longer life expectancies, these systems see increased cash outflow; if these systems underestimate increases in life-expectancies, they won't be prepared for the large payments that will inevitably occur as humans live longer and longer.
Life expectancy forecasting usually is based on two different approaches: