2011, Vol.22, No.4

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

pISSN : 2384-3209 / eISSN : 2951-3448
https://journal.kci.go.kr/kiri

According to life-cycle model, households decide consumption and saving given their lifetime income. However, if they live longer than expected lifetime, they face longevity risk as they have to live the rest of their life with scarce income. This study investigates whether rational households will increase the contribution to private pension in response to the reduction in payment of the National Pension in 2007 by income levels. Targeting 50's households in the Korean Retirement and Income Study, this study utilizes Propensity Scoring Matching and Difference in Difference. The empirical results indicate that reduction in payment of the National Pension cause the third income-tier household to decrease the contribution while fourth income-tier household to increase the contribution to private pension in response to the reduction in payment. This result suggests that the contribution to private pension is related with income level, so it is necessary for the government to increase tax benefits and subsidize low income households for private pension to assist National Pension.

Previous theoretical and empirical studies have provided the effects of financial incentives on retirement choices. Within my knowledge, this is the first empirical study to estimate a retirement probabilities model of financial incentives over the middle to old-aged in Korea. In this article, social security wealth and its accrual, peak value and option value are calculated as close as possible to the real value by using the dataset merged KReIS(version.3.4) with administrative archive managed by NPS. The main results are: First, the middle to old-aged decide a retirement taking a longer perspective over the change of the expected pension asset. Second, to achieve a desired effects from the improvement on the deferred pension, such as employment opportunities, the factors other than pension scheme need to change simultaneously. Lastly, the income effect of social security wealth on retirement probabilities is likely to vary depending on the specific pension scheme and socio-economic circumstances. This result needs to be further scrutinized through more developed studies.

This study explores the association between disability and life expectancy in Korea. In particular, using multi-state life-table models, this study estimates total, healthy, and unhealthy life expectancies to simultaneously examine the quality of life as well as the length of life. Overall the results indicate that, in addition to their shorter life spans, the disabled show a higher proportion of unhealthy state in their lives. This study also finds that differences between the disabled and non-disabled are greater in healthy life expectancy than in total life expectancy, in particular for younger aged groups. Finally, compared to total and healthy life expectancies, the results do not show significant differences in unhealthy life expectancy in general.