Essays on retirement, savings and health

As life expectancy rises and the workforce around the developed world ages, questions about retirement, savings, and health are becoming increasingly important. Are households saving enough for retirement? What is the role of employer contributions to savings accounts in determining overall savings? To what extent are households insured against health shocks and are they financially prepared to face them? How should the answers to these questions guide us in designing optimal social insurance policies?;The first chapter, jointly written with Torben Heien Nielsen, studies how households respond to severe health shocks and the insurance role of spousal labor supply. In the empirical part of the paper, we provide new evidence on individuals' labor supply responses to spousal health and mortality shocks. Analyzing administrative data on over 500,000 Danish households in which a spouse dies, we find that survivors immediately increase their labor supply and that this effect is entirely driven by those who experience significant income losses due to the shock. Notably, widows -- who experience large income losses when their husbands die -- increase their labor force participation by more than 11%, while widowers -- who are significantly more financially stable -- decrease their labor supply. In contrast, studying over 70,000 households in which a spouse experiences a severe health shock but survives -- for whom income losses are well-insured in our setting -- we find no economically significant spousal labor supply responses, suggesting adequate insurance coverage for morbidity (vs. mortality) shocks. In the theoretical part of the paper, we develop a method for welfare analysis of social insurance using only spousal labor supply responses. In particular, we show that the labor supply responses of spouses fully identify the welfare gains from insuring households against health and mortality shocks. Our findings imply large welfare gains from transfers to survivors and identify efficient ways for targeting government transfers.;The second chapter of this dissertation is jointly written with Jessica Laird and Torben Heien Nielsen. In this chapter we empirically study how firms, which play an increasingly significant role in retirement savings, set their contributions to employees' savings accounts, and analyze whether employer contributions reflect employees' savings preferences. Using a reform that decreased the subsidy for contributions to capital retirement savings accounts for Danish workers in the top income tax bracket, we find strong evidence that firms set contributions to employer-provided savings accounts in accordance with their employees' savings preferences. Specifically, we find that the reform shifted employers' contributions from capital accounts to the more subsidized annuity accounts. Furthermore, these responses were proportional to the share of employees directly affected by the reform. We also find that employers with more passive savers among the affected workers had stronger reactions, suggesting that firm responses substitute for individual responses.;In the third chapter, jointly written with David Laibson, we theoretically study savings in the presence of non-optimizing agents and the effect of a benevolent planner on overall retirement savings. As equilibrium behavior is jointly determined by the actions of households and social planners, we highlight the distinction between planner optimization and household optimization. We show that planner optimization is a substitute for household optimization and that this is true even when there are information asymmetries, so that households know more about their preferences than planners. Our analysis illustrates a potential misattribution in economic analysis. Is optimal behavior caused by optimizing households, or is optimal behavior caused by planners who paternalistically manipulate households that would not optimize on their own? We show that widely studied optimality conditions that are implied by household optimization also arise in an economy with a rational planner who uses default savings and Social Security to influence the choices of non-optimizing households. Therefore, many classical optimization conditions do not resolve the question of household optimization. Pseudo-rationality arises when rational planners elicit (seemingly) optimal behavior from non-optimizing households. (Abstract shortened by UMI.).