What determines annuity demand at retirement?

Giuseppe Cappelletti, Giovanni Guazzarotti and Pietro Tommasino

No 805, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In most advanced countries, future retirees will have to rely less on social security schemes and more on private pension plans, which mostly leave to the worker the choice between ashing-in or annuitizing pension wealth at retirement. Therefore, a better understanding of the determinants of the demand for annuities will soon become a priority. Research in this field has been hampered by lack of data (due to current market thinness) and by difficulties in disentagling demand from supply-side effects. In this paper, we avoid these problems resorting to ad hoc survey data from Italy. Our results highlight the importance of wealth, impatience, education and (to a lesser extent) financial literacy in shaping annuity demand.

Keywords: annuities; retirement; life cycle model (search for similar items in EconPapers)
JEL-codes: D91 G23 H55 J26 (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-age, nep-eur, nep-lab and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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