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The long-term effects of cancer survivorship on household assets

Author

Listed:
  • Tae-Young Pak

    (Sungkyunkwan University)

  • Hyungsoo Kim

    (University of Kentucky)

  • Kyoung Tae Kim

    (University of Alabama)

Abstract

Background Less is known about the impact of cancer on household assets and household financial portfolio during which cancer survivors face higher mortality risk. Economic theory predicts that cancer survivors would deplete their wealth in such a way that meets immediate financial needs for treatment and that hedges the risk of anticipated medical expenses associated with recurrence. Building upon this prediction, we examine long-term changes in household assets in response to cancer diagnosis among middle-aged and elderly Americans (age ≥ 50). Results Using the 2000–2014 waves of the Health and Retirement Study, we estimated the household fixed effects regression that regresses household assets on time elapsed since cancer diagnosis (≤ 2 years, > 2 but ≤4 years, > 4 but ≤6 years, and > 6 but ≤8 years). Regression estimates were adjusted for demographic characteristics, general health condition, employment outcomes, and household economic attributes. Household assets were measured by total net worth as well as the amount of savings held in each asset category. The loss of household assets attributable to cancer was estimated to be $125,832 in 2015 dollars per household with a cancer patient. This change came from statistically significant reductions in investment assets, miscellaneous savings, real estate equity, and business equity, and increases in unsecured debt. We also found 17.2–28.0% increases in cash and cash-equivalent assets from + 2 years since diagnosis through the rest of the study periods. The accumulation of cash was observed for both the well-insured group (multiple coverages) and those with limited insurance (single coverage). Conclusions The results showed evidence of both asset depletion and precautionary accumulation of liquid assets among cancer survivors, which reduces risk exposure of household financial portfolio. Our findings highlighted that household asset is an important source of liquidity to finance cancer care and to absorb the expected expenditure risk associated with cancer recurrence. We also showed that health insurance provides limited coverage of health risks associated with cancer.

Suggested Citation

  • Tae-Young Pak & Hyungsoo Kim & Kyoung Tae Kim, 2020. "The long-term effects of cancer survivorship on household assets," Health Economics Review, Springer, vol. 10(1), pages 1-11, December.
    • Handle: RePEc:spr:hecrev:v:10:y:2020:i:1:d:10.1186_s13561-019-0253-7
    DOI: 10.1186/s13561-019-0253-7
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    References listed on IDEAS

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    1. Alexandra Spicer & Olena Stavrunova & Susan Thorp, 2016. "How Portfolios Evolve after Retirement: Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 92(297), pages 241-267, June.
    2. W. Dominika Wranik & Adam Muir & Min Hu, 2017. "Costs of productivity loss due to occupational cancer in Canada: estimation using claims data from Workers’ Compensation Boards," Health Economics Review, Springer, vol. 7(1), pages 1-11, December.
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    Cited by:

    1. Rettl, Daniel A. & Schandlbauer, Alexander & Trandafir, Mircea, 2022. "Employee Health and Firm Performance," IZA Discussion Papers 15147, Institute of Labor Economics (IZA).
    2. Stephanie Moulton & Donald Haurin & Samuel Dodini & Maximilian D. Schmeiser, 2020. "How federally insured reverse mortgages affect the credit outcomes of older adults," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(4), pages 1298-1327, December.

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    More about this item

    Keywords

    Cancer treatment; Financial toxicity; Health shock; Asset depletion; Background risk;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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