Morbidity, Mortality, Health Expenditures and Annuitization

35 Pages Posted: 13 Sep 2007

See all articles by Kam Ki Tang

Kam Ki Tang

University of Queensland - School of Economics

Jie Zhang

University of Queensland - School of Economics

Date Written: August 2007

Abstract

In this paper we explore the implication of a morbidity risk for the relationship between longevity and annuitization. We divide old-age life into two periods with uncertain survival from the end of the first to the end of the second. We show that a rise in the survival rate causes different patterns of change in annuitization, depending on the initial survival rate. When the initial survival rate is low (high), there is full (partial) annuitization. There is thus an inverse relationship between longevity and annuitization.

Keywords: annuity, morbidity, mortality, precautionary saving

JEL Classification: E2, J1, L1

Suggested Citation

Tang, Kam Ki and Zhang, Jie, Morbidity, Mortality, Health Expenditures and Annuitization (August 2007). CESifo Working Paper Series No. 2086, Available at SSRN: https://ssrn.com/abstract=1014024 or http://dx.doi.org/10.2139/ssrn.1014024

Kam Ki Tang

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia
+61 07 3365 9796 (Phone)
+61 07 3365 7299 (Fax)

HOME PAGE: http://www.uq.edu.au/economics/index.html?page=15910&pid=15834

Jie Zhang (Contact Author)

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia
+61 07 3365 6488 (Phone)
+61 07 3365 7299 (Fax)

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