Stimulating annuity marketsHeijdra, B. J., Mierau, J. O. & Trimborn, T., Oct-2017, In : Journal of Pension Economics and Finance. 16, 4, p. 554-583 30 p.
Research output: Contribution to journal › Article › Academic › peer-review
We study the short-, medium-, and long-run implications of stimulating annuity markets in a dynamic general-equilibrium overlapping-generations model. We find that beneficial partial-equilibrium effects of stimulating annuity markets are counteracted by negative general-equilibrium repercussions. Balancing the positive partial-equilibrium and negative general-equilibrium forces we show that there exists an intermediate level of annuitization such that the lifetime utility of steady-state agents is maximized. Studying the transition to this optimal degree of annuitization shows that currently middle-aged individuals stand to gain most from the stimulation of annuity markets. Complementing our main analysis, we highlight the centrality of the interplay between human-capital accumulation and annuity market policy.
|Number of pages||30|
|Journal||Journal of Pension Economics and Finance|
|Early online date||16-Apr-2016|
|Publication status||Published - Oct-2017|
- EARNINGS, GROWTH, HUMAN-CAPITAL ACCUMULATION, LIFE-CYCLE, DEMOGRAPHIC-CHANGE, SOCIAL-SECURITY, WELFARE, CONSUMPTION, MODEL, overlapping generations, Individual welfare, annuity markets, computable general equilibrium