Three essays on retirement insurance in China

dc.contributor.advisor Bateman, Hazel
dc.contributor.advisor Hanewald, Katja Wan, Cheng 2022-02-28T04:22:19Z 2022-02-28T04:22:19Z 2021
dc.description.abstract This thesis studies several important issues for ageing populations in developing countries facing basic public provisions of health services and pensions and high levels of air pollution. In particular, I investigate the demand for longevity, critical illness insurance (CII), and long-term care insurance (LTCI) in developing countries from both theoretical and empirical perspectives. I also study how PM2.5 (particles less than 2.5 micrometres in diameter) affects multimorbidity, cognition, and disability in activities of daily living (ADL) that are important health indicators for the old. The results provide insights into the design and risk management of retirement insurance products and government policies. First, we conduct an online experimental survey to elicit and analyse preferences for retirement portfolio including longevity, CII, and LTCI products after the COVID-19 pandemic outbreak in urban China. We observe a high variation of insurance demand by individual factors and COVID-19 experience, and their effects can be opposite by health-contingent insurance and life annuity. On average, the most preferred retirement portfolio contains health-contingent insurance that covers half of the expected out-of-pocket (OOP) costs for critical illness and long-term care expenditures, a monthly annuity of 20% of the disposable income. The portfolio that covers half of the OOP cost for long-term care, critical illness, or both, is most effective in increasing annuitisation. Next, we derive the optimal portfolio for retirees in China facing uncertain lifespan, catastrophic medical expenditures, and long-term care costs. An optimal portfolio highly depends on a retiree’s economic background. For a retiree with an average pension, we find that at least 30% of retirement wealth is allocated to CII, while at least 40% is allocated to a life annuity for those with a low pension. The demand for LTCI is less than 15% of retirement savings. State-dependent utility and bundled insurance products can both increase annuity demand for some retirees. Finally, we investigate the long-term impact of exposure to PM2.5 on multimorbidity, cognition, and ADL disability for the middle- and old-aged adults in China. We find different non-linear associations between PM2.5 exposure and the three health outcomes, and we also observe different impacts of past and current exposure to PM2.5 on them. We interpret the risk of PM2.5 exposure by comparing it to the effects of ageing.
dc.language English
dc.language.iso en
dc.publisher UNSW, Sydney
dc.rights CC BY 4.0
dc.subject.other Retirement
dc.subject.other long-term care insurance
dc.subject.other annuity
dc.subject.other multimorbidity
dc.subject.other cognition
dc.subject.other air pollution
dc.subject.other China
dc.title Three essays on retirement insurance in China
dc.type Thesis
dcterms.accessRights open access
dcterms.rightsHolder Wan, Cheng
dspace.entity.type Publication
unsw.contributor.advisorExternal Fang, Hanming; University of Pennsylvania
unsw.relation.faculty Business School Risk & Actuarial Studies School Risk & Actuarial Studies
unsw.subject.fieldofresearchcode 38 ECONOMICS
unsw.subject.fieldofresearchcode 380108 Health economics
unsw.subject.fieldofresearchcode 380107 Financial economics
unsw.subject.fieldofresearchcode 380114 Public economics - publicly provided goods
unsw.thesis.degreetype PhD Doctorate
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