Mortality Heterogeneity and the Distributional Consequences of Mandatory Annuitization
This article investigates the distributional consequences of mandatory annuitization. Using Health and Retirement Study (HRS) data and accounting for longevity risk pooling within marriage and preannuitized wealth, we find substantial redistribution away from disadvantaged groups in expected utility terms. Using HRS data on subjective survival probabilities, we construct a subjective life table for each individual in the HRS. We calculate the value each household would place on annuitization, based on the husband and wife's subjective life tables, and the household's degree of risk aversion and proportion of preannuitized wealth. A significant minority would perceive themselves as suffering a loss from mandatory annuitization. Copyright (c) The Journal of Risk and Insurance, 2008.
Year of publication: |
2008
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Authors: | Gong, Guan ; Webb, Anthony |
Published in: |
Journal of Risk & Insurance. - American Risk and Insurance Association - ARIA, ISSN 0022-4367. - Vol. 75.2008, 4, p. 1055-1079
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Publisher: |
American Risk and Insurance Association - ARIA |
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