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Title:Betting on a long life: The role of subjective life expectancy in the demand for private pension insurance of german households PDF Logo
Authors:Schulte, Katharina
Zirpel, Ulrike
Issue Date:2010
Series/Report no.:Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2010,06
Abstract:With a view to investigating the presence of adverse selection, we analyze determinants of private pension insurance uptake of German households in a probit model. Using survey data on savings and old-age provision, we find that subjective life expectancy is positively related with the probability of having supplementary private pension insurance. This indicates that the German annuities market is in fact characterized by adverse selection. Furthermore, pre-existing annuities from the public pension system tend to be a substitute to private insurance, while financial literacy enhances the uptake. We also find evidence for a bequest motive in old-age provision, but see no indication for pooling longevity risk within couples.
JEL:D82
G22
D91
J26
Document Type:Working Paper
Appears in Collections:Economics Working Papers, Department of Economics, CAU Kiel

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