The Future of Mortality: Demographic Implications to the Social Security Trust Fund

Samir Soneji, Princeton University
Gary King, Harvard University

We assess how demographic factors, specifically mortality, directly affect the fiscal viability of the Social Security public pension program. Future mortality, in turn, is affected by historical and current lifestyle, behavior, and biomedical advances. Yet, official forecasts are based on historical mortality trends and unspecified subjective judgment. In contrast, we use a general Bayesian hierarchical modeling approach to develop mortality forecasts that considers rising obesity and decreasing smoking prevalence over the last 50 years in the US. We calculate future gains in life expectancy and project the the solvency of the Social Security Trust Fund. As a methodological advance in demographic forecasting, we also apply the Bayesian Modeling Averaging technique to the account for model based uncertainty in mortality forecasts.