Stimulating annuity markets*
Ben Heijdra (),
Jochen Mierau () and
Timo Trimborn ()
Journal of Pension Economics and Finance, 2017, vol. 16, issue 4, 554-583
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.
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Working Paper: Stimulating Annuity Markets (2014)
Working Paper: Stimulating annuity markets (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:16:y:2017:i:04:p:554-583_00
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