Longevity, Health and Housing Risks Management in Retirement
52 Pages Posted: 14 Mar 2023
There are 2 versions of this paper
Longevity, Health and Housing Risks Management in Retirement
Swiss Finance Institute Research Paper No. 23-18
Number of pages: 52
Posted: 14 Mar 2023
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Longevity, Health and Housing Risks Management in Retirement
NBER Working Paper No. w31038
Number of pages: 51
Posted: 20 Mar 2023
Last Revised: 23 Apr 2023
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11
Date Written: March 13, 2023
Abstract
Annuities, long-term care insurance and reverse mortgages remain puzzlingly unpopular to manage post-retirement longevity, health and housing price risks. We analyze the lack of interest using a flexible life-cycle model structurally estimated with a unique stated-preference survey experiment of Canadian households. High risk aversion, preference for early resolution of uncertainty, strong discounting of valuation in disability states, housing substitutability and bequest motives play key roles in explaining most of the limited demand. The remaining disinterest is accounted for by information frictions and inertia. We also document evidence of public crowding out, spousal co-insurance and of responsiveness to products bundling.
Keywords: Annuity, Long-term care insurance, Reverse mortgage, Asst decumulation, Housing, Disability
JEL Classification: G52, G51
Suggested Citation: Suggested Citation
Michaud, Pierre-Carl and St-Amour, Pascal, Longevity, Health and Housing Risks Management in Retirement (March 13, 2023). Swiss Finance Institute Research Paper No. 23-18, Available at SSRN: https://ssrn.com/abstract=4388459 or http://dx.doi.org/10.2139/ssrn.4388459
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