THE EFFECT OF HEALTH ON SAVING BY ELDERLY PERSONS

Project: Research project

Description

This project will investigate the differences in assets held by persons
of differing health status and the short-term effects of health on
savings of elderly persons in the community. Using data from the Survey
of Income and Program Participation, this study will compare the levels
of total net worth and the portfolio of assets held by persons
distinguished by aspects of their health, including self-reported health
status, reported limitations in activities of daily living and mobility,
reported days limited to bed, and prior hospitalization. Regression
estimates, conditional on retirement status and corrected for possible
bias in the data, will be made to estimate the effects of health on the
level and composition of wealth. The study will also estimate saving rates for elderly persons using the
longitudinal data from the survey. After grouping individuals and
households by their reported characteristics, saving rates will be
estimated using mean log rates of accumulation and a ratio estimator,
both of which are consistent in the presence of some reporting errors in
wealth. While reporting errors make individual level estimates of saving
suspect, a simple regression model of the effects of the health variables
on saving rates will be estimated, and the results compared to the
previous grouped estimates. Results from the study can be used to refine
simulation models which predict the future income and wealth of the
elderly and their demand for private health and long term care insurance.
StatusFinished
Effective start/end date9/1/928/31/94

Funding

  • National Institutes of Health

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Health
Saving rate
Health status
Assets
Wealth and income
Wealth
Income
Retirement
Hospitalization
Estimator
Program participation
Regression model
Long-term care insurance
Net worth
Activities of daily living
Self-reported health
Grouping