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A Dynamic Analysis of Household Dissolution and Living Arrangement Transitions by Elderly Americans

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  • Axel Borsch-Supan
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    Abstract

    This paper exploits the new non-response files of the Panel Study of income Dynamics in order to study living arrangement transitions of elderly Americans. The focus of the paper is an estimate of the probability of household dissolution, i.e., the probabilities of transitions from living independently to living with adult children or other related or unrelated persons and the probability of becoming institutionalized, and an investigation of the factors causing such transitions. Our main result is an astounding stability of living arrangements even after incisive life-events such as death of a spouse, onset of a disability, or in the years immediately preceding death, in particular the large proportion of elderly who stay living independently until their deaths. Almost two thirds of all elderly are living independently in the year of their deaths. 14.4 percent share at least once housing with relatives or friends, 3.1 percent experience a stay in an institution. Old age, being male or of low income significantly increases the risk of institutionalization. Elderly with a large family and nonwhite elderly are the groups most likely to share housing. All this might be expected. An important new finding, however, is the time trend of these probabilities. Holding all other factors constant, the risk of institutionalization increased substantially between 1968 and 1984 while the likelihood of being "taken in" by relatives or friends markedly decreased.

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    File URL: http://www.nber.org/papers/w2808.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2808.

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    Date of creation: Jan 1989
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    Publication status: published as "Elderly Americans: A Dynamic Analysis of HOusehold Dissolution and Living Arrangement Transitions" in Issues in the Economics of Aging (ed)David Wise, University of Chicago Press, 1989.
    Handle: RePEc:nbr:nberwo:2808

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    1. David T. Ellwood & Thomas J. Kane, 1989. "The American Way of Aging: An Event History Analysis," NBER Working Papers 2892, National Bureau of Economic Research, Inc.
    2. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 47(1), pages 225-38, January.
    3. Jonathan Feinstein & Daniel McFadden, 1987. "The Dynamics of Housing Demand by the Elderly: Wealth, Cash Flow, and Demographic Effects," NBER Working Papers 2471, National Bureau of Economic Research, Inc.
    4. Laurence J. Kotlikoff & John N. Morris, 1990. "Why Don’t the Elderly Live with Their Children? A New Look," NBER Chapters, in: Issues in the Economics of Aging, pages 149-172 National Bureau of Economic Research, Inc.
    5. Alan M. Garber & Thomas E. MaCurdy, 1989. "Predicting Nursing Home Utilization Among the High-Risk Elderly," NBER Working Papers 2843, National Bureau of Economic Research, Inc.
    6. Axel Borsch-Supan & Laurence J. Kotlikoff & John N. Morris, 1988. "The Dynamics of Living Arrangements of the Elderly," NBER Working Papers 2787, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Eric V. Edmonds & Kristin Mammen & Douglas L. Miller, 2005. "Rearranging the Family?: Income Support and Elderly Living Arrangements in a Low-Income Country," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    2. Louise Sheiner & David N. Weil, 1992. "The Housing Wealth of the Aged," NBER Working Papers 4115, National Bureau of Economic Research, Inc.

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