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Title:Optimal Choice of Health and Retirement in a Life-Cycle Model PDF Logo
Authors:Kuhn, Michael
Wrzaczek, Stefan
Prskawetz, Alexia
Feichtinger, Gustav
Issue Date:2011
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2011: Die Ordnung der Weltwirtschaft: Lektionen aus der Krise - Session: The Life-Cycle Consumption Model E16-V1
Abstract:We examine within a life-cycle set-up the choice of health and retirement. Health care contributes to a reduction in both mortality, determining the need to accumulate retirement wealth, and in morbidity, determining the disutility of work. The retirement age affects health through the value of survival and the value of morbidity reductions. We compare the allocation for a first-best setting where the individual can transfer wealth freely within a perfect annuity market with a second-best set-up with an incentive incompatible (yet actuarially fair) retirement scheme and an imperfect annuity market and show how the inefficiencies shape the health-retirement nexus.
Subjects:annuities
demand for health
moral hazard
life-cycle-model
optimal control
retirement
value of life
JEL:D91
I12
J26
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2011: Die Ordnung der Weltwirtschaft - Lektionen aus der Krise

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