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Retirement, Imperfect Annuity Markets and AgingCasper Worm HansenAarhus University - Department of Economics and Business; Netspar Lars LønstrupUniversity of Southern Denmark - Department of Business and Economics; Netspar September 25, 2010 Abstract: We show that the recent tendency of increasing labor force participation in age groups 55-59 and 60-65 can be explained by lower unintended bequests caused by the observed compression of mortality. This result arises from introducing imperfect annuity markets and uncertain survival into a model where individuals live in two overlapping generations. In addition, we show that annuity market imperfections may provide a utilitarian rationale for a public pay-as-you-go pension system that counterbalances the intergenerational transfer of wealth from unintended bequests.
Number of Pages in PDF File: 32 Keywords: Retirement, imperfect annuity markets, aging, pay-as-you-go pensions JEL Classification: D52; D91; E21; H55; J10; J26 working papers seriesDate posted: June 8, 2010 ; Last revised: November 14, 2010Suggested CitationContact Information
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