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Do Wealth Shocks Matter for the Life Satisfaction of the Elderly? Evidence from the Health and Retirement Study

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Abstract

This note studies the determinants of life satisfaction for the elderly and near-elderly in the U.S., using data from the Health and Retirement Study. The econometric analysis exploits the 2008-09 financial crisis as a source of exogenous variation in wealth, caused by a long-lasting decrease in asset prices. Although absolute changes in wealth are not found to systematically affect individuals' well-being, losing 60% or more of the pre-crisis wealth negatively impacted measures of life satisfaction.

Suggested Citation

  • Marco Cozzi & Qiushan Li, 2020. "Do Wealth Shocks Matter for the Life Satisfaction of the Elderly? Evidence from the Health and Retirement Study," Department Discussion Papers 2002, Department of Economics, University of Victoria.
    • Handle: RePEc:vic:vicddp:2002
    Note: ISSN 1914-2838 JEL Classifications: D14, E21, I31, J14
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    More about this item

    Keywords

    Wealth; Uninsurable shocks; Life Satisfaction; Subjective Well-Being;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • D1 - Microeconomics - - Household Behavior

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    This paper has been announced in the following NEP Reports:

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