1. June 23, 2003AVW06230311 International Mortality Comparisons Richard MacMinn Richard MacMinn Edmondson-Miller Chair Katie School College of Business Illinois State University

2. June 23, 20032 Opening comments Data The Human Mortality Database Perspectives on international mortality data Period data Select birth cohorts Rationales for mortality improvements

3. June 23, 20033 Objectives Look for common trends in mortality improvement data Identify select birth cohorts Seek causal links for mortality improvements Compare immediate annuity costs using historical mortality data

4. June 23, 20034 Select birth cohorts A select cohort is a birth cohort characterized by greater rates of mortality improvement that previous and subsequent generations. A number of select birth cohorts have been identified in the literature England & Wales (1925-45), Sweden (1900-10), and Japan (1910-20) More select birth cohorts are noted here.

5. June 23, 20035 Select birth cohorts Country Select cohort years England & Wales1925-44 Norway1940-44 Sweden1925-34 Denmark1935-39 France1935-44 Switzerland1930-34 Italy1910-191910-19, 1930-391930-39 Austria1905-141905-14, 1935-391935-39 Japan1910-191910-19, 1940-441940-44 United States1910-191910-19, 1930-391930-39

6. June 23, 20036 England & Wales There are some dramatic mortality improvements by period The GAD identified generations born between 1925 and 1945 as select birth cohorts. Mean mortality improvements jumped from a max of 1.8% to 3.8% for select cohorts. The standard deviation jumped from.043 to.056

7. June 23, 20037 England & Wales

8. June 23, 20038 England & Wales

9. June 23, 20039 England & Wales

10. June 23, 200310 England & Wales The next figure compares immediate annuity costs for different birth cohorts. At each date the figure provides the cost for an immediate annuity that covers the individual for age 25 through 45.

11. June 23, 200311 England & Wales

12. June 23, 200312 England & Wales

13. June 23, 200313 England & Wales

14. June 23, 200314 Norway There are some dramatic mortality improvements by period Note the 1870’s and late 1940’s. A 1940 select birth cohort has been identified.

15. June 23, 200315 Norway

16. June 23, 200316 Norway

17. June 23, 200317 Norway

18. June 23, 200318 Sweden There are some dramatic mortality improvements by period Note 1915-19 and the early 1940’s. 1925 and 1930 select birth cohorts have been identified. The mean mortality improvement increased and the standard deviation decreased for the select cohorts.

19. June 23, 200319 Sweden

20. June 23, 200320 Sweden

21. June 23, 200321 Sweden

22. June 23, 200322 Denmark There are some dramatic improvements in the 1940’s 1925 and 1935 exhibit select cohorts properties

23. June 23, 200323 Denmark

24. June 23, 200324 Denmark

25. June 23, 200325 Denmark

26. June 23, 200326 France There are dramatic period effects subsequent to 1915 and 1945. A 1935 select cohort seems to exist

27. June 23, 200327 France

28. June 23, 200328 France

29. June 23, 200329 France

30. June 23, 200330 France

31. June 23, 200331 West Germany Some dramatic period effects exist, e.g., 1965. 1905, 1910 and 1915 exhibit select birth cohort effects

32. June 23, 200332 West Germany

33. June 23, 200333 West Germany

34. June 23, 200334 West Germany

35. June 23, 200335 Switzerland There are quite dramatic period effects for the 1920’s and 1940’s 1930 and 1950 exhibit select cohort properties

36. June 23, 200336 Switzerland

37. June 23, 200337 Switzerland

38. June 23, 200338 Switzerland

39. June 23, 200339 Switzerland

40. June 23, 200340 Italy There are dramatic positive and negative effects in the 1940’s. The 1915, 1930 and 1935 cohorts exhibit select properties. The 1915 and 1935 cohorts exhibit higher mean mortality improvements and lower standard deviations that surrounding cohorts

41. June 23, 200341 Italy

42. June 23, 200342 Italy

43. June 23, 200343 Italy

44. June 23, 200344 Italy

45. June 23, 200345 Austria There is a significant negative mortality effect in the 1960’s similar to other countries. The 1900, 1905, 1910, 1915 and 1935 cohorts exhibit select properties

46. June 23, 200346 Austria

47. June 23, 200347 Austria

48. June 23, 200348 Austria

49. June 23, 200349 Austria

50. June 23, 200350 Japan Significant period effects persisted into the 1950’s at early ages. The 1910, 1915 and 1935 cohorts exhibit select properties

51. June 23, 200351 Japan

52. June 23, 200352 Japan

53. June 23, 200353 Japan

54. June 23, 200354 Japan

55. June 23, 200355 Japan The next figure compares immediate annuity costs for different birth cohorts. At each date the figure provides the cost for an immediate annuity that covers the individual for age 25 through 45.

56. June 23, 200356 Japan

57. June 23, 200357 United States Significant period effects occurred in the 1960’s and 1980’s. The 1915, 1930 and 1935 cohorts exhibit select properties

58. June 23, 200358 United States

59. June 23, 200359 United States

60. June 23, 200360 United States

61. June 23, 200361 United States

62. June 23, 200362 United States The next figure compares immediate annuity costs for different birth cohorts. At each date the figure provides the cost for an immediate annuity that covers the individual for age 25 through 45.

63. June 23, 200363 United States

64. June 23, 200364 Annuity comparisons The figure provides a comparison of immediate annuity costs for Japan, England & Wales and the United States

65. June 23, 200365 Annuity comparisons The correlation between the change in costs is significant. The correlation between the: US and England & Wales is 59% US and Japan is 52% England & Wales and Japan is 33%

66. June 23, 200366 Close The mortality experience in the countries investigated exhibit similar trends from both a period and a cohort perspective. The similar mortality experience is confirmed by the sizable correlation between the changes in annuity costs.