Potential Years of Life Lost: a new approach and an application to a pension scheme

Abstract

In the first part of the paper, after a historical review of the various formulations for the calculation of the P.Y.L.L., we propose an original one, in which the P.Y.L.L. is conditioned to the reaching of a fixed age. In the second part we utilize the new formula of the P.Y.L.L. within a pension scheme improving the approximation of the solution of the balance equation. In the last part this new indicator is applied to determine the average monthly contribution paid by an Italian employee in 1991, then the result obtained in this way is compared with those obtained by more traditional formulas.