Hidden redistribution in lifetime earnings: the role of differential mortality

Differences in life expectancy between gender and income groups are large and generate significant implicit redistribution in lifetime earnings through pension systems. We use administrative data on the universe of private sector wage earners in France to quantify these effects. We establish two main results. In terms of between gender redistribution, we find that differential mortality – life expectancy at 55 is 5.7 years higher among women than among men – reduces lifetime income inequality between men and women: absent this differential in life expectancy, the pension gap between men and women would be 72% higher, in a lifetime perspective. Second, within gender, high income earners benefit from hidden lifetime redistribution due to higher life expectancy. We find a life expectancy gradient of 7.2 years between the extremes of the distribution among men, 1.8 years among women. Among men, this hidden redistribution more than offsets the overall progressivity of the pension system.