TY  - BOOK
AU  - Hansen,Gary D.
AU  - Imrohoroglu,Selahattin
ED  - National Bureau of Economic Research.
TI  - Consumption Over the Life Cycle: The Role of Annuities 
T2  - NBER working paper series
PY  - 2006///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - June 2006; Hardcopy version available to institutional subscribers
N2  - We explore the quantitative implications of uncertainty about the length of life and a lack of annuity markets for life cycle consumption in a general equilibrium overlapping generations model in which markets are otherwise complete. Empirical studies find that consumption tends to rise early in life, peak around age 45-55, and to decline after that. Our calibrated model exhibits life cycle consumption that is consistent with this pattern. This follows from the fact that, due to a lack of annuity markets, households discount the future more heavily as they age and their probability of survival falls. Once an unfunded social security system is introduced, the profile is still hump shaped, but the decline in consumption does not begin until after retirement in our base case. Adding a bequest motive causes this decline to begin at a younger age
UR  - https://www.nber.org/papers/w12341
UR  - http://dx.doi.org/10.3386/w12341
ER  -