Social Security, Life Insurance and Annuities for Families

Jay Hong and José-Víctor Ríos-Rull

No 410, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: We revisit the issue of the usefulness of Social Security when there are frictions that prevent the existence of a fluid market for annuities. We model households as families and not as individual agents which provides a rationale for the existence of life insurance. Moreover, our structure also allows us to incorporate altruism towards dependents, providing for a unified picture of the various risks associated to the timing of death. The simultaneous existence of widespread life insurance and very limited annuities holdings is part of our quest. We want to know whether the lack of annuities is a product of the existence of social security or whether it is due to more fundamental problems (the moral hazard of house ownership, the adverse selection that it is way harder to detect in the case of long lived than in those that are likely to die soon). In our research we will explore various possible configurations of privately provided annuities (from inexistence to fully and cheaply provided to expensive and limited to financial and non housing levels), and how their existence is affected by Social Security, both in its basic form and in its Survivors Benefits program.

Keywords: Family; Macroeconomics (search for similar items in EconPapers)
JEL-codes: D10 E60 J10 (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.ssc.upenn.edu/~vr0j/papers/ssc.pdf main text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: Social security, life insurance and annuities for families (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed006:410

Access Statistics for this paper

More papers in 2006 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().