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How price-elastic is the demand for retirement saving?

Author

Listed:
  • Alexis Direr

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, LEO - Laboratoire d'Économie d'Orleans [UMR7322] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique)

  • Rim Ennajar-Sayadi

    (AXA France)

Abstract

We exploit an administrative data set of a big insurance company to assess the effects on annuity demand of a French regulatory reform which impacted actuarial return to deferred life annuity products. Unlike in previous studies, annuity demand is measured by contributions to savings products that result in capital being converted into annuities at retirement. Our identification methodology is based on the fact that while female savers’ annuity rate (conversion rate of capital into annuities) fell by 10%, male savers who did not expect to take the survivor option at retirement were not affected by the reform. Assuming that single men fall into this category, and using this population as a control group, we find a decrease in demand by women of − 16%, which corresponds to a price elasticity of subscriptions of − 1.5. The reform did not significantly alter contributions to saving accounts. We also document a very large anticipation effect created by the opportunity offered to early subscribers to benefit from older pricing.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Alexis Direr & Rim Ennajar-Sayadi, 2019. "How price-elastic is the demand for retirement saving?," Post-Print halshs-02492600, HAL.
    • Handle: RePEc:hal:journl:halshs-02492600
    DOI: 10.1057/s41288-018-0112-5
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