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