Modeling and Forecasting Mortality With Economic Growth: A Multipopulation Approach.

Area of Science:

• Demography
• Actuarial Science
• Economics

Background:

• Traditional mortality modeling often relies on extrapolating past trends and latent factors.
• Existing models may not fully capture socioeconomic influences on mortality patterns across populations.

Purpose of the Study:

• To propose a novel multipopulation stochastic mortality model.
• To integrate economic growth, specifically real Gross Domestic Product (GDP) per capita, as a key explanatory variable.
• To improve the accuracy of mortality trend analysis and life expectancy forecasting for populations with similar socioeconomic conditions.

Main Methods:

• Extension of the established Li and Lee (2005) mortality model.
• Inclusion of real GDP per capita to represent economic growth.
• Application to multiple populations with comparable socioeconomic backgrounds.

Main Results:

• The proposed model demonstrates superior in-sample fit compared to the baseline Li and Lee model.
• Out-of-sample forecasting performance is significantly enhanced.
• Forecasted period life expectancy differs, with lower projections for high-GDP countries and higher for low-GDP countries relative to the Li and Lee model.

Conclusions:

• Economic growth is a significant factor in multipopulation mortality modeling.
• The enhanced model provides more nuanced and accurate life expectancy forecasts.
• This approach offers improved insights into the relationship between socioeconomic factors and population mortality trends.