Incidental Bequests and the Choice to Self-Insure Late-Life Risks

• 成果类型: Article
• 署名作者: Lockwood, Lee M.
• 署名单位: University of Virginia; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20141651
• 发表日期: 2018
• 页码: 2513-2550
• 关键词: long-term-care; NURSING-HOME USE; intergenerational transfers; private information; capital accumulation; simulated moments; Medical expenses; UNITED-STATES; WEALTH; MARKET

摘要

Despite facing significant uncertainty about their lifespans and health care costs, most retirees do not buy annuities or long-term care insurance. In this paper, I find that retirees' saving and insurance choices are highly inconsistent with standard life-cycle models in which people care only about their own consumption but match well models in which bequests are luxury goods. Bequest motives tend to reduce the value of insurance by reducing the opportunity cost of precautionary saving. The results suggest that bequest motives significantly increase saving and significantly decrease purchases of long-term care insurance and annuities.