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Life Expectancy and Old Age Savings

Author Info

  • Mariacristina De Nardi
  • Eric French
  • John Bailey Jones

Abstract

Rich people, women, and healthy people live longer. We document that this heterogeneity in life expectancy is large, and we use an estimated structural model to assess its effect on the elderly's saving. We find that the differences in life expectancy related to observable factors such as income, gender, and health have large effects on savings, and that these factors contribute by similar amounts. We also show that the risk of outliving one's expected lifespan has a large effect on the elderly's saving behavior.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.99.2.110
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 99 (2009)
Issue (Month): 2 (May)
Pages: 110-15

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Handle: RePEc:aea:aecrev:v:99:y:2009:i:2:p:110-15
Note: DOI: 10.1257/aer.99.2.110
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Find related papers by JEL classification:
  • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
  • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
  • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

References listed on IDEAS
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  1. Li Gan & Guan Gong & Michael Hurd & Daniel McFadden, 2004. "Subjective Mortality Risk and Bequests," NBER Working Papers 10789, National Bureau of Economic Research, Inc.
  2. Michael D. Hurd & Daniel McFadden & Angela Merrill, 2001. "Predictors of Mortality among the Elderly," NBER Chapters, in: Themes in the Economics of Aging, pages 171-198 National Bureau of Economic Research, Inc.
  3. Mariacristina De Nardi & Eric French & John Bailey Jones, 2006. "Differential Mortality, Uncertain Medical Expenses, and the Saving of Elderly Singles," 2006 Meeting Papers 46, Society for Economic Dynamics.
  4. Feenberg, Daniel & Skinner, Jonathan, 1994. "The Risk and Duration of Catastrophic Health Care Expenditures," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 633-47, November.
  5. Hubbard, R. Glenn & Skinner, Jonathan & Zeldes, Stephen P., 1994. "The importance of precautionary motives in explaining individual and aggregate saving," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 59-125, June.
  6. Angus Deaton, 1989. "Saving and Liquidity Constraints," NBER Working Papers 3196, National Bureau of Economic Research, Inc.
  7. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2004. "Do the Rich Save More?," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 397-444, April.
  8. Eric French & John Bailey Jones, 2004. "On the distribution and dynamics of health care costs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 705-721.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Explaining heterogeneity in individual saving rates
    by Economic Logician in Economic Logic on 2009-01-24 02:38:00
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