2013, Vol.24, No.4

Journal of Insurance and Finance 2023 KCI Impact Factor : 0.59

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

The National Pension's fund is expected to exhaust in 2060, because of the aging population and National Pension(NP)'s generous benefit structure. Therefore, the parametric reforms of increasing contribution,decreasing benefit, or a mixture of them have been necessary. NP finally carried out the reform of decreasing payment rate from 60% to 40% in 2007. Even though the importance of private pension is rising,the application and persistency rate of private pension has been low since its introduction. The concern was enhanced in the subsidy to contribution of private pension which is similar to the Riester Pension in Germany. This paper studied the effect of the firm's contribution subsidy to employee's private pension. The data used in this paper is the 2000-2007 Survey of Korea Labor & Income Panel Study (KLIPS). In the static model, which was not considered for the state dependence, the firm's contribution subsidy significantly increased the application for employee's private pension. However, in the dynamic model, which was considered for the state dependence, the firm's contribution subsidy has no significant effect on the application for employee's private pension.

This article studies how the incentive of controlling shareholders based on their ownership affects the corporate social responsibility (CSR)activities in Korea. Empirically, we find that direct ownership (cash flow rights) of controlling shareholders has a significantly negative influence on CSR, while their indirect ownership through affiliates has a positive effect. These results support previous findings that CSR could be the way to increase the private benefit of controlling shareholders. We confirm the same results using the environmental management activities as a dependent variable, and the results are robust after controlling for endogeneity problem. The findings are more strongly observed in firms with large profit and free cash flow, suggesting that controlling shareholders in such firms could pursue more of their private benefit of control than those in firms with less profit or free cash flow. Our analysis will provide practical and institutional implications, regarding finding the way to enhance shareholder wealth through CSR, and for both of managers and stakeholders to mutually benefit from it.

This paper proposes a theory that has the potential to explain the annuity puzzle,i.e., the low demand for annuities in the U.S. and other countries. Specifically, this paper finds that the lack of liquidity of annuities, combined with adverse health shocks, can account for the low demand for annuities. Annuities are less attractive because the elderly find it hard to sell back annuities in case of large medical expenses due to serious health problems. In relation to this, the paper examines the role of the value of life, an intrinsic value attached to a life itself, in the annuity puzzle. If it means a lot to be alive, people would spend more on medical care and hence could demand annuities less. In a series of quantitative analyses,however, I find that the value of life does not reduce the annuity demand much,because more medical care motivated by the value of life can increase the life expectancy, which in turn can raise the annuity demand by increasing the expected payoffs of annuities.