Social Security, Life Insurance and Annuities for Families
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.
|Date of creation:||03 Dec 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
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.:
- Hubbard, R Glenn & Judd, Kenneth L, 1987. "Social Security and Individual Welfare: Precautionary Saving, Borrowing Constraints, and the Payroll Tax," American Economic Review, American Economic Association, vol. 77(4), pages 630-46, September.
- Julio Dávila & Jay H. Hong & Per Krusell & José‐Víctor Ríos‐Rull, 2012.
"Constrained Efficiency in the Neoclassical Growth Model With Uninsurable Idiosyncratic Shocks,"
Econometric Society, vol. 80(6), pages 2431-2467, November.
- Julio Davila & Jay H. Hong & Per Krusell & Jose-Victor Rios-Rull, 2005. "Constrained efficiency in the neoclassical growth model with uninsurable idiosyncratic shocks," PIER Working Paper Archive 05-023, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Julio Davila & Jay H. Hong & Per Krusell & José-Victor Rios Rull, 2005. "Constrained efficiency in the neoclassical growth model with uninsurable idiosyncratic shocks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196183, HAL.
- DAVILA, Julio & HONG, Jay H. & KRUSELL, Per & RIOS-RULL, JosÃ©-Victor, . "Constrained efficiency in the neoclassical growth model with uninsurable idiosyncratic shocks," CORE Discussion Papers RP 2463, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Julio Davila & Jay H. Hong & Per Krusell & José-Victor Rios Rull, 2005. "Constrained efficiency in the neoclassical growth model with uninsurable idiosyncratic shocks," Cahiers de la Maison des Sciences Economiques b05066, Université Panthéon-Sorbonne (Paris 1).
- Julio Davila & J.H. Jong & Per Krusell & José-Victor Rios Rull, 2012. "Constrainted efficiency in the neoclassical growth model with uninsurable idiosyncratic skocks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00751900, HAL.
- Juan C. Conesa & Dirk Krueger, 1999. "Social Security Reform with Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(4), pages 757-795, October.
- Jay H. Hong & Jose-Victor Rios-Rull, 2004.
"Life insurance and household consumption,"
04-10, Federal Reserve Bank of Philadelphia.
- Andrew B. Abel, 1985.
"Capital Accumulation and Uncertain Lifetimes with Adverse Selection,"
NBER Working Papers
1664, National Bureau of Economic Research, Inc.
- Abel, Andrew B, 1986. "Capital Accumulation and Uncertain Lifetimes with Adverse Selection," Econometrica, Econometric Society, vol. 54(5), pages 1079-97, September.
- Imrohoroglu, Ayse & Imrohoroglu, Selahattin & Joines, Douglas H, 1995. "A Life Cycle Analysis of Social Security," Economic Theory, Springer, vol. 6(1), pages 83-114, June.
When requesting a correction, please mention this item's handle: RePEc:red:sed006:410. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.