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“The lost ones: the opportunities and outcomes of non-college-educated Americans born in the 1960s”

Author

Listed:
  • Margherita Borella

    () (University of Turin and CeRP-Collegio Carlo Alberto)

  • Mariacristina De Nardi

    (Federal Reserve Bank of Minneapolis)

  • Fang Yang

    (Louisiana State University)

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, and 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 them by more. Welfare losses, measured as a one-time 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.

Suggested Citation

  • Margherita Borella & Mariacristina De Nardi & Fang Yang, 2019. "“The lost ones: the opportunities and outcomes of non-college-educated Americans born in the 1960s”," CeRP Working Papers 188, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  • Handle: RePEc:crp:wpaper:188
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    References listed on IDEAS

    as
    1. Giovanni Gallipoli & Laura Turner, 2009. "Household Responses to Individual Shocks: Disability and Labor Supply," Working Paper series 04_09, Rimini Centre for Economic Analysis.
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    9. 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.
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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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