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Key Findings Details

Crowd-out, Adverse Selection and Information in Annuity Markets: Evidence from a New Retrospective Data Set in Chile
Alejandra Cox Edwards and Estelle James
WP 2006-147

  • Workers in Chile must either annuitize their personal retirement accounts or take gradual withdrawal. Two-thirds annuitize.
  • There is evidence that this publicly financed annuity crowds out private annuity insurance.
  • Retirees with health problems are less likely to annuitze, leading to adverse selection.
  • Those with greater risk aversion, smaller time preference, and better knowledge about the system are more likely to annuitize.