TY - JOUR
T1 - Uncertain lifetimes and the welfare enhancing properties of annuity markets and social security
AU - Eckstein, Zvi
AU - Eichenbaum, Martin
AU - Peled, Dan
N1 - Funding Information:
*We appreciate helpful conversations and suggestions from our colleagues Jon Eaton, Lars Hansen, Robert Kaplan, Larry Kotlikoff, Chester Spatt, Robert Townsend and Allen Zelentiz. Financial support by NSF grant no. SES-8308575 is gratefully acknowledged.
PY - 1985/4
Y1 - 1985/4
N2 - This paper explores the implications of social security programs and annuity markets through which agents, who are characterized by different distributions of length of lifetime, share death-related risks. When annuity markets operate, a non-discriminatory social security program affects only the intragenerational allocation of resources. In the absence of private information regarding individual survival probabilities, such a program will lead to a non-optimal intragenerational allocation of resources. However, the presence of adverse selection considerations gives rise to a Pareto improving role for a mandatory non-discriminatory social security program.
AB - This paper explores the implications of social security programs and annuity markets through which agents, who are characterized by different distributions of length of lifetime, share death-related risks. When annuity markets operate, a non-discriminatory social security program affects only the intragenerational allocation of resources. In the absence of private information regarding individual survival probabilities, such a program will lead to a non-optimal intragenerational allocation of resources. However, the presence of adverse selection considerations gives rise to a Pareto improving role for a mandatory non-discriminatory social security program.
UR - http://www.scopus.com/inward/record.url?scp=0041082261&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0041082261&partnerID=8YFLogxK
U2 - 10.1016/0047-2727(85)90012-X
DO - 10.1016/0047-2727(85)90012-X
M3 - Article
AN - SCOPUS:0041082261
SN - 0047-2727
VL - 26
SP - 303
EP - 326
JO - Journal of Public Economics
JF - Journal of Public Economics
IS - 3
ER -