Why do we postpone annuity purchases?

Author(s)
Hippolyte d’Albis, Andrei Kalk
Abstract

This paper seeks to explain why annuity purchases are postponed to a later age. We consider an overlapping generations model with uncertain lifetime and two types of annuities. It is shown that, if the economy is dynamically inefficient, individuals demand annuities without delay. However, if it is efficient, annuity purchases are postponed. We also show that these results are robust to several extensions.

Organisation(s)
Department of Economics
External organisation(s)
Paris School of Economics, Centre National de la Recherche Scientifique (CNRS)
Journal
Journal of Mathematical Economics
ISSN
0304-4068
DOI
https://doi.org/10.1016/j.jmateco.2021.102500
Publication date
2021
Peer reviewed
Yes
Austrian Fields of Science 2012
502047 Economic theory
Keywords
Portal url
https://ucris.univie.ac.at/portal/en/publications/why-do-we-postpone-annuity-purchases(d28dbe56-c859-4169-945b-bdf2464b1fcc).html