The effect of longevity risks on the performance of stock market

  • Released On
    Thursday, 27 April 2017
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  • DOI
    http://dx.doi.org/10.21511/imfi.14(1-1).2017.03
  • Article Info
    Volume 14 2017, Issue #1 (cont.), pp. 173-180
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In this study the author examines the effect of the speed of population aging on the financial markets in 11 OECD (The Organisation for Economic Co-operation and Development) countries after controlling the proportion of labor population, the growth rate of real GDP (Gross Domestic Product), the rate of increasing productivity, inflation rate, and the rate of increasing scale of pension market. The author finds that the performance of stock market is affected by complex factors including increasing of average life expectancy, the growth rate of real GDP, the rate of increasing productivity, the inflation rate, the earning rate of stock market and the rate of increasing scale of pension market. Especially, the proportion of economically active people is the most significant factor to explain the stock market performance. Considering the decreasing proportion of economically active people in aging societies, the decrease of productivity and eventually the decrease of earnings from financial markets would be expected.

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    • Fig. 1.Life expectancy at birth
    • Fig. 2.Labor productivity
    • Fig. 3.Real GDP (trillion US$ in 2010)
    • Fig. 4.Stock market performance
    • Fig 5.Pension fund asset (billion US$)
    • Table 1. International aging rate comparison among developed countries
    • Table 2.Descriptive statistics
    • Table 3.Correlation
    • Table 4.Regressionresults