In private pre-funded retirement savings systems, workers can be compelled by regulation to make minimum contributions to retirement accounts. We examine the impact of compulsory contributions into retirement savings (superannuation) accounts on individuals' lifetime consumption and wealth using...

In the aftermath of the financial crisis of 2008, there is increased concern about the potentially catastrophic pension default risk, which results in significant decreases in pension benefits. In order to address the challenge of annuity income uncertainty, I propose a dynamic annuitization...

In this paper, we develop a new dynamic programming approach for solving an optimal retirement model in a two-dimensional incomplete market, which is induced by forced unemployment risk and borrowing constraints. We show that the two dimensions jointly affect an individual's optimal consumption,...

The Livret de Développement Durable et Solidaire (LDDS) and the Livret A are French regulated savings products. The financial institutions that offer them must remunerate savers at a rate set by a formula. In return, the savings deposits are invested, generally in fixed-rate loans, the rate of...

In this paper we consider an overlapping generations model with endogenous fertility and two-sided altruism and show the limitations of applying commonly used open loop Nash equilibrium in characterizing equilibrium transfers from parents to children in the form of bequest and transfers from...

Although rational consumers without bequest motives are better oÞ investing exclusively with annuitized instruments in partial equilibrium, we demonstrate the welfare effect of annuitization is ambiguous in general equilibrium on account of the pecuniary externality. Accidental bequests improve...

The purpose of this paper is to understand the effects of the elasticity of intertemporal substitution (EIS) and risk aversion on savings separately and determine which coefficient is more important factor for precautionary savings. This is an important question since a significant fraction of...

Moral hazard models with hidden saving decisions are useful to study such diverse problems as unemployment insurance, income taxation, executive compensation, or human capital policies. How can we solve such models? In general, this is very difficult. Under the conditions derived in this paper,...

This paper examines the first order approach to moral hazard problems in which the agent can secretly save and borrow. The paper shows that hidden saving constrains the concavity of the agent's problem even for CARA utility and additively separable effort disutility in an important way:...