TY - JOUR AU - Auerbach,Alan J. AU - Gokhale,Jagadeesh AU - Kotlikoff,Laurence J. AU - Sabelhaus,John AU - Weil,David N. TI - The Annuitization of Americans' Resources: A Cohort Analysis JF - National Bureau of Economic Research Working Paper Series VL - No. 5089 PY - 1995 Y2 - April 1995 UR - http://www.nber.org/papers/w5089 L1 - http://www.nber.org/papers/w5089.pdf N1 - Author contact info: Alan J. Auerbach Department of Economics 530 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/643-0711 Fax: 510/643-0413 E-Mail: auerbach@econ.berkeley.edu Jagadeesh Gokhale Senior Fellow CATO Institute 1000 Mass. Ave., NW Washington, DC 20001 E-Mail: jgokhale@cato.org Laurence J. Kotlikoff Department of Economics Boston University 270 Bay State Road Boston, MA 02215 Tel: 617/353-4002 Fax: 617/353-4001 E-Mail: kotlikoff@gmail.com John Sabelhaus Federal Reserve Board 20th and C Streets NW Washington DC 20551 E-Mail: john.sabelhaus@frb.gov David N. Weil Department of Economics Box B Brown University Providence, RI 02912 Tel: 401/863-1754 Fax: 401/863-1970 E-Mail: david_weil@brown.edu AB - This paper constructs a unique cohort data set to study the changes since 1960 in the share of Americans' resources that are annuitized. Understanding these changes is important because the larger this share, the more cohorts are likely to consume and the less they are likely to bequeath. Hence, the degree of annuitization affects national saving as well as the transmission of inequality over time. Our findings are striking. Although the annuitized share of resources of younger Americans declined slightly between 1960 and 1990, it increased dramatically for older Americans. It doubled for older men and quadrupled for older women. Since the elderly have much higher mortality probabilities than do the young, their degree of annuitization is much more important for aggregate bequests and saving. According to our estimates, aggregate U.S. bequests would now be 66 percent larger had the post-1960 increase in annuitization not occurred. In addition, U.S. national saving would likely be substantially larger than is currently the case. ER -