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How well do Chinese estimate their life expectancy? Implications for retirement plans for 400 million+

Elderly friends enjoying life

Understanding subjective life expectancy (SLE) is critical for pension design and longevity insurance markets. Yet there are very few studies that focus on this question. This paper is the first of its kind to analyse subjective life expectancy in China. It draws on a recent longitudinal survey data (two years) in which participants were asked about their life expectancies. This paper statistically analyses the relationship between subjective life expectancy and various demographic, social and economic factors. We compare SLE with census-based life expectancy.

Results suggest that unisex samples between late 30s and late 60s in general underestimate their life expectancy relative to national data. But while younger women also underestimate life expectancy, younger men over-estimate time to death relative to national estimates. Econometric model analysis focuses on provincial levels covering age, sex, education, health, marital, income and social relationship and retirement arrangements. The results indicate that demographics and family relationships are more important than economic status in people’s perceptions of their life expectancy.