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The Increasing Annuitization of the Elderly- Estimates and Implications for Intergenerational Tranfers, Inequality, and National Saving

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Author Info
Alan J. Auerbach
Laurence J. Kotlikoff
David N. Weil

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Abstract

This paper examines changes over time in the degree to which the resources (human plus nonhuman wealth) of the elderly have been annuitized. Using data from the 1962 and 1983 Federal Reserve Surveys of Consumer Finances we find evidence of an increase in annuitization which is particularly pronounced among the older elderly (those over 75) and among women. The estimated 1983 flow of aggregate bequests to children and grandchildren would have been 20% larger were it not for this increase in annuitization. The change in annuitization may have contributed significantly to the recent decline of the U.S. national saving rate.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4182.

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Date of creation: Oct 1992
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Handle: RePEc:nbr:nberwo:4182

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Davies, James B, 1981. "Uncertain Lifetime, Consumption, and Dissaving in Retirement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 561-77, June. [Downloadable!] (restricted)
  2. Bernheim, B Douglas, 1991. "How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 899-927, October. [Downloadable!] (restricted)
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  3. Robert B. Avery & Gregory E. Elliehausen, 1986. "Financial characteristics of high-income families," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Mar, pages 163-177.
  4. Martin Feldstein & Jeffrey B. Liebman, 2001. "Social Security," NBER Working Papers 8451, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    • Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier. [Downloadable!] (restricted)
  5. Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1993. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," NBER Working Papers 3046, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Michael D. Hurd & David A. Wise, 1989. "The Wealth and Poverty of Widows: Assets Before and After the Husband'sDeath," NBER Working Papers 2325, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Abel, Andrew B, 1985. "Precautionary Saving and Accidental Bequests," American Economic Review, American Economic Association, vol. 75(4), pages 777-91, September. [Downloadable!] (restricted)
  8. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June. [Downloadable!] (restricted)
  9. Benjamin M. Friedman & Mark Warshawsky, 1988. "Annuity Prices and Saving Behavior in the United States," NBER Working Papers 1683, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Laurence J. Kotlikoff, 1989. "Intergenerational Transfers and Savings," NBER Working Papers 2237, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Ann A. McDermed & Robert L. Clark & Steven G. Allen, 1987. "Pension Wealth, Age-Wealth Profiles. and the Distribution of Net Worth," NBER Working Papers 2439, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus & David N. Weil, 1995. "The Annuitization of Americans' Resources: A Cohort Analysis," NBER Working Papers 5089, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, 2000. "New Evidence on the Money's Worth of Individual Annuities," NBER Working Papers 6002, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Rowena A. Pecchenino & Patricia S. Pollard, 1998. "Reforming Social Security: a welfare analysis," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 19-30. [Downloadable!]
  4. W. G. Gale & J. K. Scholz, . "Intergenerational transfers and the accumulation of wealth," Institute for Research on Poverty Discussion Papers 1019-93, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
    Other versions:
  5. Patricia S. Pollard & Rowena A. Pecchenino, 1998. "The transition from a-pay-as-you-go to a fully-funded Social Security System: is there a role for social insurance?," Working Papers 1997-022, Federal Reserve Bank of St. Louis. [Downloadable!]
  6. Jeffrey R. Brown & James M. Poterba, 1999. "Joint Life Annuities and Annuity Demand by Married Couples," NBER Working Papers 7199, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Alpo Willman, 2007. "Sequential optimization, front-loaded information, and U.S. consumption," Working Paper Series 765, European Central Bank. [Downloadable!]
  8. Rowena A. Pecchenino & Patricia S. Pollard, 1995. "The effects of annuities, bequests, and aging in an overlapping generations model of endogenous growth," Working Papers 1995-008, Federal Reserve Bank of St. Louis. [Downloadable!]
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  9. Rowena A. Pecchenino & Patricia S. Pollard, 2001. "Government mandated private pensions: a dependable foundation for retirement security?," Working Papers 1999-012, Federal Reserve Bank of St. Louis. [Downloadable!]
    Other versions:
  10. Jeffrey R. Brown, 1999. "Private Pensions, Mortality Risk, and the Decision to Annuitize," NBER Working Papers 7191, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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