Working Paper: NBER ID: w5760
Authors: Tomas Philipson; Gary S. Becker
Abstract: This paper analyzes the savings and health care impacts of mortality contingent claims, defined here as income measures, such as annuities and life-insurance, under which earned income is contingent on the length of one's life. The postwar increase in mandatory annuity and life-insurance programs, as well as the rapid increase in life-expectancy, motivates a better understanding of the effects that mortality contingent claims have on resources devoted to life-extension. We analyze the incentives that such claims imply for life-extension when resources may affect mortality endogenously and argue that these incentives dramatically alter the standard conclusions obtained when mortality is treated exogenously.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mortality contingent claims (J17) | savings behavior (D14) |
| mortality contingent claims (J17) | health care investments (I11) |
| health care investments (I11) | life expectancy (J17) |
| life expectancy (J17) | health care expenditures (H51) |
| public annuities (G22) | over-investment in life-extending medical care (H51) |
| interaction between public savings programs and private savings (H55) | increased overall health care costs (I11) |
| mortality as endogenous (I12) | complexities in health investments and life expectancy (I14) |
| incentives from annuities (G22) | welfare losses due to distorted life expectancy outcomes (I14) |