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The Lost Ones: The Opportunities and Outcomes of White, Non-College-Educated Americans Born in the 1960s

In: NBER Macroeconomics Annual 2019, volume 34

Author

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  • Margherita Borella
  • Mariacristina De Nardi
  • Fang Yang

Abstract

White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s; men’s wages declined more than women’s. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings, but the increase in out-of-pocket medical expenses increased savings by more. Welfare losses, measured as a onetime asset compensation, are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47%–58% of these losses, shorter life expectancies 25%–34%, and higher medical expenses account for the rest.
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Suggested Citation

  • Margherita Borella & Mariacristina De Nardi & Fang Yang, 2019. "The Lost Ones: The Opportunities and Outcomes of White, Non-College-Educated Americans Born in the 1960s," NBER Chapters, in: NBER Macroeconomics Annual 2019, volume 34, pages 67-115, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:14249
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    References listed on IDEAS

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    1. Svetlana Pashchenko & Ponpoje (Poe) Porapakkarm & Mariacristina De Nardi, 2017. "The Lifetime Costs of Bad Health," 2017 Meeting Papers 533, Society for Economic Dynamics.
    2. Giovanni Gallipoli & Laura Turner, 2009. "Household Responses to Individual Shocks: Disability and Labor Supply," Working Paper series 04_09, Rimini Centre for Economic Analysis.
    3. Giulio Fella & Giovanni Gallipoli, 2014. "Education and Crime over the Life Cycle," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1484-1517.
    4. Zvi Eckstein & Michael Keane & Osnat Lifshitz, 2019. "Career and Family Decisions: Cohorts Born 1935–1975," Econometrica, Econometric Society, vol. 87(1), pages 217-253, January.
    5. Alberini, Anna & Cropper, Maureen & Krupnick, Alan & Simon, N.B.Nathalie B., 2004. "Does the value of a statistical life vary with age and health status? Evidence from the US and Canada," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 769-792, July.
    6. David Wiczer & Amanda Michaud, 2017. "The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks," 2017 Meeting Papers 1459, Society for Economic Dynamics.
    7. Margherita Borella & Mariacristina De Nardi & Eric French, 2018. "Who Receives Medicaid in Old Age? Rules and Reality," Fiscal Studies, John Wiley & Sons, vol. 39(1), pages 65-93, March.
    8. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 969-1006.
    9. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2017. "The Effects of Marriage-Related Taxes and Social Security Benefits," NBER Working Papers 23972, National Bureau of Economic Research, Inc.
    10. Nicolas A. Roys & Christopher R. Taber, 2019. "Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men," NBER Working Papers 26453, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Nicolas A. Roys & Christopher R. Taber, 2019. "Skill Prices, Occupations, and Changes in the Wage Structure for Low Skilled Men," NBER Working Papers 26453, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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