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Events
Mortality Beliefs and Household Finance Puzzles
October 20, 2016Macro, Trade, and Finance Seminar Series

Speaker: Raphael Schoenle is an Assistant Professor of Economics at Brandeis University.  More »

Abstract: Subjective mortality beliefs influence individual discount rates, affecting savings rates pre- and post-retirement. New survey evidence indicates that the salience of cohort-specific causes-of death causes younger individuals to overestimate mortality, and elderly individuals to overestimate survival probabilities. These distorted mortality beliefs correlate with savings behavior, even controlling for cognitive and socioeconomic factors. We embed an estimated survival belief function into a canonical life-cycle model. Relative to a benchmark model using actuarial transition probabilities, the young under-save (31% lower retirement savings), and retirees draw down their assets more slowly (14% lower retirement consumption), reconciling contradictory savings puzzles at opposite ends of the life-cycle.

Paper»

Last Updated: Oct 14, 2016

The Macro, Trade, and Finance Seminar Series is a weekly series hosted by the World Bank's research department. The series invites leading researchers from the fields of macroeconomics, growth, trade, international integration, and finance to present the results of their most recent research in a seminar format. The full list of seminars can be viewed here.

Last Updated: Jul 27, 2015

Event Details
  • Date: October 20, 2016
  • Location: MC 9-100
  • Time: 12:30 – 2:00 pm
  • CONTACT: Shweta Mesipam
  • smesipam@worldbank.org



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