Abstract
This paper examines the implications of the absence of complete annuity
markets on the distribution of wealth and welfare of agents whose
saving decisions are obtained under uncertainty regarding the length
of their life. The absence of annuities is shown to yield a unique
nondegenerate intragenerational distribution of wealth, which is
fully characterized. This characterization is then used to evaluate
the Pareto desirability of an annuity system. Alternative welfare
criteria that can be used when the proposed change has differential
impacts on the initial state of subsequent generations are considered.
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