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This paper examines the optimal design of pension plans when the health status during retirement is uncertain. Assuming that the health status affects both life expectancy and the marginal utility of consumption, choice between a lump-sum payment and an annuity can be welfare-enhancing if the...
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Why does patience vary across individuals and countries? We provide evidence on a widely-hypothesized mechanism, namely that higher longevity fosters patience. Using data on patience for 80,000 individuals in 76 countries, this paper relates exogenous variation in longevity across...
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household's mortality risk itself to be stochastic. Annuities still help to hedge longevity risk, but they are now subject to … valuation risk. Valuation risk is a powerful gateway mechanism for numerous frictions to reduce annuity demand, even without ad …
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This paper investigates the predictive power of time preferences on the risk of early mortality and illness in … associated with lifestyle risk factors. Patient adolescents are also more in favor of sports activities and school rules on … preferences on early mortality by one-fourth …
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