Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64009
Authors: 
Alho, Juha
Määttänen, Niku
Year of Publication: 
2006
Series/Report no.: 
ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 1005
Abstract: 
Future improvements in mortality are difficult to forecast. In this paper, we incorporate uncertainty about future mortality, or aggregate mortality risk, into an otherwise standard life cycle model with an intertemporal consumption-savings decision. The aggregate mortality process is calibrated based on European mortality series. We use the model to quantify the welfare cost of aggregate mortality risk and the extent to which individuals can insure themselves against it using life annuities with a constant payout stream.
Subjects: 
annuities, aggregate mortality risk
JEL: 
G22
D14
Document Type: 
Working Paper

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