Michaud, Pierre-Carl and Pascal St-Amour (2025), “Longevity, Health and Housing Risks Management in Retirement”, 2nd revision requested, The Journal of Finance, paper
- Abstract: Annuities, long-term care insurance and reverse mortgages remain puzzlingly unpopular products to manage post-retirement longevity, health and housing price risks. We analyze the lack of interest using a flexible life-cycle model structurally estimated with a unique stated-preference survey experiment of Canadian house- holds. High risk aversion, preference for early resolution of uncertainty, strong discounting of valuation in disability states, housing substitutability and bequest motives play key roles in explaining most of the limited demand. The remaining disinterest is accounted for by information frictions and inertia. We also document evidence of public crowding out, spousal co-insurance and of responsiveness to products bundling.
Pelgrin, Florian and Pascal St-Amour (2025), “Till death (or else) do us part: Asset Accumulation in Couples over the Life Cycle” (in progress)
- Abstract: Under the Community of Assets matrimonial regime, agents in couples share assets acquired after marriage and are each entitled to pre-specified shares of household wealth. We propose and solve a non-cooperative life cycle model with generalized recursive preferences (i.e. non-expected utility) featuring age-dependent mortality and divorce risks, altruism towards the partner, when both are alive and living in the couple, and after own death when the widowed partner becomes singles and inherits household resources. We analyze the effects of partners’ sharing rules, differential age, mortality, wages, and wealth between partners. We also study how opposing life cycle profiles of divorce and mortality risks contribute to the joint puzzles of under-savings by younger agents, and under-dissavings by elders.
Achou, Bertrand, Max Groneck, Pierre-Carl Michaud, Pascal St-Amour and Raun Van Ooijen (2025), “Formal and Informal Child and Long-term Care and Intra-family Transfers” (in progress)
- Abstract: We analyze the time and resources spent on both formal and informal care in extended family structures involving children, adults and elders. In particular, we propose a non-cooperative OLG model featuring life cycle decisions on formal and informal child care, as well as formal and informal long-term care choices made by both adults and elders. We numerically solve the model to identify the cross-generational effects of policy changes on formal child- and long-term care to elders.