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The determinants of annuitization: evidence from Sweden
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics, Uppsala Center for Fiscal Studies.
2014 (English)Report (Other academic)
Abstract [en]

This paper uses unique micro data from a Swedish occupational pension plan to study the determinants of annuitization. The data is merged with national administrative data to create a large data set with rich individual background characteristics. The pension can either be withdrawn as a life annuity or during a fixed number of years with a minimum of ve years. Low accumulation of assets is strongly associated with the choice of the 5-year payout. Consistent with the predictions of a life-cycle model, retirees who choose the 5-year payout are in worse health and exhibit higher ex-post mortality rates than annuitants. I alsofind that the parents of annuitants live longer than the parents of those who choose the 5-year payout. This suggests that individuals form expectations about how long they are likely to live based on the life-span patterns of their parents and take this into account when they decide whether to annuitize or not.

Place, publisher, year, edition, pages
Uppsala, 2014. , 34 p.
Working paper / Uppsala Center for Fiscal Studies, Uppsala University, 2014:13
Keyword [en]
Annuity puzzle; Longevity insurance; Occupational pension; Adverse
National Category
Research subject
URN: urn:nbn:se:uu:diva-236362OAI: diva2:764203
Available from: 2014-11-18 Created: 2014-11-18 Last updated: 2014-11-19Bibliographically approved

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Hagen, Johannes
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