Long-Term-Care Utility and Late-in-Life Saving
By J. Ameriks, Joseph Briggs, Andrew Caplin, M. Shapiro, Christopher Tonetti. Journal of Political Economy, 2020
150 citations recorded by the source corpus.
Older wealth holders spend down assets much more slowly than predicted by classic life-cycle models. This paper introduces health-dependent utility into a model with incomplete markets in which preferences for bequests, expenditures when in need of long-term care, and ordinary consumption combine with health and longevity uncertainty to explain saving behavior. To sharply identify motives, it develops strategic survey questions (SSQs) that elicit stated preferences. The model is estimated using these SSQs and wealth data from the Vanguard Research Initiative. The desire to self-insure against long-term-care risk explains a substantial fraction of the wealth holding of many older Americans.
Subfields: Accounting, Demography, General Health Professions
View Paper: https://www.semanticscholar.org/paper/4ed433012bb6cfd6ff62be2b63d95a931d1d5e1d
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Citations in the corpus
- The Value of Working Conditions in the United States and Implications for the Structure of Wages (2018, unknown): “…evidence for many economic topics including environmental policy (Carlsson and Martinsson, 2001; Carson, 2012), consumer preferences (Revelt and Train, 1998), labor supply (Kimball and Shapiro, 2008), retirement decisions (van Soest and Vonkova, 2014), and long-term care (Ameriks et al., 2015).”
- What Would You Do with $500? Spending Responses to Gains, Losses, News, and Loans (2018, unknown): “Using strategically-designed survey questions in conjunction with structural models has also been fruitfully applied to other questions related to household financial decisions (Ameriks et al., 2015, 2016). This paper sits firmly in the “reported preference” approach. Our data come from a survey of ”
- Wealth Distribution and Social Mobility in the US: A Quantitative Approach (2015, methodology): “(2017) and Bach et al. (2017) using, respectively Norwegian and (22)The bequest motive stands on relative solid grounds: it is well documented that retirees do not run down their wealth as predicted by the classical life-cycle consumption-savings model (Poterba et al.”