|
EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/46250
|
| | |
| Title: | | How much do means-tested benefits reduce the demand for annuities?  |
| Authors: | | Bütler, Monika Peijnenburg, Kim Staubli, Stefan |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Empirical and Theoretical Methods 3493 |
| Abstract: | | We analyze the effect of means-tested benefits on annuitization decisions. Most industrialized countries provide a subsistence level consumption floor in old age, usually in the form of means-tested benefits. The availability of such means-tested payments creates an incentive to cash out (occupational) pension wealth for low and middle income earners, instead of taking the annuity. Agents trade-off the advantages from annuitization, receiving the wealthenhancing mortality credit, to the disadvantages, giving up 'free' wealth in the form of means-tested supplemental benefits. We find that the availability of means-tested benefits can reduce the desired annuitization levels substantially. Using individual level data, we show that the model's predicted annuitization rates as a function of the level of pension wealth are roughly consistent with the cash-out patterns of occupational pension wealth observed in Switzerland. |
| Subjects: | | means-tested benefit occupational pension annuity life-cycle model |
| JEL: | | D81 D91 G23 J26 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/46250
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|