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How do unisex life care annuities embedded in a pay-as-you-go retirement system affect gender redistribution?

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Pla-Porcel, Javier and Ventura-Marco, Manuel and Vidal-Meliá, Carlos (2017) How do unisex life care annuities embedded in a pay-as-you-go retirement system affect gender redistribution? [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 11, 2017, ISSN: 2341-2356 ] (Unpublished)

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Official URL: http://eprints.ucm.es/41907/1/1711.pdf


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Abstract

This paper aims to assess gender redistribution when using unisex conversion factors to compute the initial benefit of life care annuities (LCAs) embedded in a pay-as-you-go (PAYG) pension system. We use a method based on actuarial factors to disentangle the hidden redistribution of LCAs with graded benefits. The value of the actuarial factor relies on a multistate framework in which transitions are modeled from the initial health state to the absorbing state. According to our calculations for Australia and the US, the amount of gender redistribution is by no means irrelevant. In spite of the very different biometric data, the results are surprisingly similar for both countries. Risk equalization based on the “equal treatment” of men and women may not be fair, given that age, gender and health state are very significant risk factors in computing the initial benefit in a system covering retirement and long-term care.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Gender, Life Care Annuities, Long-Term Care Insurance, Multistate model, Redistribution, Retirement.
Subjects:Social sciences > Economics > Public economy
Social sciences > Economics > Insurance
JEL:G22, H55, I13, J14, J26
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2017
Number:11
ID Code:41907
Deposited On:24 Mar 2017 09:38
Last Modified:29 May 2017 10:38

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