In this paper we investigate the effect of systematic longevity risk, i.e., the risk arising from uncertain future survival probabilities, on the attractiveness of different types of annuities. We consider a life-cycle framework with expected utility where an individual faces both investment and longevity risk. In contrast to existing literature we allow not only for idiosyncratic, but also for...

This article examines personal and work-related characteristics of a sample of the nearly 1 million Federal civil-service retirees who were receiving annuities based on their own wage records as of December 31, 1975. Employment patterns and subsequent annuities in civil-service careers have been related to corresponding experience in jobs covered under the old-age, survivors, disability, and he...

We study adverse selection using data from an 1808 Act of British Parliament that effectively opened a market for life annuities. Our analysis indicates significant selection effects. The evidence for adverse selection is strongest for a sub-sample of annuitants whose annuities were purchased by profit-seeking speculators, a sub-sample in which “advantageous selection” resulting from multi-dime...

This article examines the extent to which annuitants of the Federal employee Civil Service Retirement System (CSRS) are entitled to Social Security benefits. It is based on linked administrative data files from the two systems. Ninety-one percent of all those receiving CSRS annuities in 1979 had worked at some point in their careers in jobs that were covered by Social Security. Almost 80 percen...