Economic security in international retirement systems

The four related essays in this dissertation examine the issue of retirement security from the point of view of the individual agent. The first essay examines the economic role played by defined benefit plans using a standard life cycle model. This essay concludes that defined benefit pension plans provide diversification out of financial markets for workers late in their working lives, and relatively cheap access to annuities markets. These benefits are found to be more valuable if private annuity markets are unfair, if wages are relatively stable, if equity markets are highly variable and if individuals are relatively wealthy. For younger workers, defined benefit plans are found to be undesirable from a life-cycle point of view.; The second essay uses aggregate mortality data from nine countries to examine adverse selection in annuities markets. The authors derive a model that predicts the extent of adverse selection in a given annuity market. This model leads to a rejection of the hypothesis that adverse selection differs between purchasers of voluntary and purchasers of compulsory annuities. The model is used to examine some Japanese annuitant tables, which are found to be statistically significantly different from international norms.; The third essay extends the second by trying to distinguish between the effects of private information related to income and other types of private information in giving rise to adverse selection. The approach adopted here is found not to work in practice because insurance companies are able to select risks when they sell underwrite life insurance products, implying that the observed mortality of life insurance purchasers increases as policy duration increases.; The final essay examines the role played by housing in the retirement portfolios of Singaporeans. The paper finds that most Singaporeans can expect to retire with most of their assets in residential housing. The paper changes to either Singapore's national housing policy or Singapore's mandatory defined contribution provident fund have spill-over effects in the other program, owing to connections between the two. The paper concludes with some policy advice and some issues raised by the Singapore experience for countries with mandatory defined contribution pension systems.