Abstract
We use exogenous variation in Social Security payments created by the Social Security benefits notch to estimate how retirees' use of prescription medications responds to changes in their incomes. Using data from the 1993 Wave of the AHEAD, we obtain instrumental variables estimates of the income elasticity of prescription drug use that are uniformly above one, with a middle estimate of 1.32. Simulations based on our estimates suggest that reductions in Social Security benefits similar to those incorporated in recent reform proposals would significantly reduce prescription drug use among the elderly.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 411-432 |
| Number of pages | 22 |
| Journal | Journal of Human Resources |
| Volume | 41 |
| Issue number | 2 |
| State | Published - Mar 1 2006 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Strategy and Management
- Organizational Behavior and Human Resource Management
- Management of Technology and Innovation
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Income and the use of prescription drugs by the elderly : Evidence from the notch cohorts. / Moran, John R.; Simon, Kosali Ilayperuma.
In: Journal of Human Resources, Vol. 41, No. 2, 01.03.2006, p. 411-432.Research output: Contribution to journal › Article
TY - JOUR
T1 - Income and the use of prescription drugs by the elderly
T2 - Evidence from the notch cohorts
AU - Moran, John R.
AU - Simon, Kosali Ilayperuma
PY - 2006/3/1
Y1 - 2006/3/1
N2 - We use exogenous variation in Social Security payments created by the Social Security benefits notch to estimate how retirees' use of prescription medications responds to changes in their incomes. Using data from the 1993 Wave of the AHEAD, we obtain instrumental variables estimates of the income elasticity of prescription drug use that are uniformly above one, with a middle estimate of 1.32. Simulations based on our estimates suggest that reductions in Social Security benefits similar to those incorporated in recent reform proposals would significantly reduce prescription drug use among the elderly.
AB - We use exogenous variation in Social Security payments created by the Social Security benefits notch to estimate how retirees' use of prescription medications responds to changes in their incomes. Using data from the 1993 Wave of the AHEAD, we obtain instrumental variables estimates of the income elasticity of prescription drug use that are uniformly above one, with a middle estimate of 1.32. Simulations based on our estimates suggest that reductions in Social Security benefits similar to those incorporated in recent reform proposals would significantly reduce prescription drug use among the elderly.
UR - http://www.scopus.com/inward/record.url?scp=33745088693&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=33745088693&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:33745088693
VL - 41
SP - 411
EP - 432
JO - Journal of Human Resources
JF - Journal of Human Resources
SN - 0022-166X
IS - 2
ER -