Differential mortality and redistribution in the French pension system

Differences in life expectancy between income groups are important and can generate large implicit (anti)redistributive effects in pension systems. Our study employs administrative data from the private sector’s second-pillar pension scheme to quantify these effects. Our analysis finds a notable gradient in life expectancy among men based on their permanent income, with a difference of around seven years. For women, this gradient is smaller, at around two years. Next, we evaluate the redistributive impact of the pension scheme and find that high-income earners have higher return on contributions than their lower-income counterparts. This is because the unequal life expectancy among different income groups more than offsets the scheme’s redistributive features.

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