Gender-Inclusive Financial and Demographic Literacy: Monetizing the Gender Mortality Gap

Longevity crucially affects demand for pensions, insurance products and an- nuities. Consistent empirical evidence shows that women have historically expe- rienced lower mortality rates than men. In this paper, we study a measure of the gender gap in mortality rates, we call “Gender Gap Ratio”, across a wide range of ages and for four countries: France, Italy, Sweden and USA. We show the stylized facts that characterize the trend of the Gender Gap Ratio, both in its historical evolution and future projection. Focusing on an example temporary life annuity contract, we give a monetary consistency to the Gender Gap Ratio. We show ev- idence that a Gender Gap Ratio that ranges between 1.5 and 2.5, depending on age, translates into a significant reduction of up to 23% in the benefits from a temporary life annuity contract for women with respect to men, against the same amount invested in the life annuity. The empirical evidence discussed in this pa- per documents the crucial importance of working towards a more widespread de- mographic literacy, e.g., a range of tools and strategies to raise longevity conscious- ness among individuals and policy-makers, in the framework of gender equality policies.