IDEAS home Printed from https://ideas.repec.org/p/crr/crrwps/wp2005-17.html
   My bibliography  Save this paper

How Portfolios Evolve After Retirement: The Effect of Health Shocks

Author

Listed:
  • Courtney C. Coile
  • Kevin Milligan

Abstract

We study the household portfolios of the elderly using data from the Health and Retirement Study. In particular, we investigate the influence of aging and health shocks on both a household’s ownership of various assets and the dollar value and share of total assets held in each asset class. We find that households decrease their ownership of most asset classes as they age, with the strongest evidence for principal residences and vehicles. Using several types of health shocks, we proceed to relate the observed asset changes to the onset of different health problems. Consistent with the previous literature, we find that the death of a spouse is a strong predictor of selling the principal residence. However, we find that more subtle health shocks have equally strong, although more gradual, impacts on the asset choices of the elderly. These findings help us to understand the methods by which and extent to which households are able to self-insure against some of the risks of old age.

Suggested Citation

  • Courtney C. Coile & Kevin Milligan, 2005. "How Portfolios Evolve After Retirement: The Effect of Health Shocks," Working Papers, Center for Retirement Research at Boston College wp2005-17, Center for Retirement Research, revised Dec 2005.
  • Handle: RePEc:crr:crrwps:wp2005-17
    as

    Download full text from publisher

    File URL: http://crr.bc.edu/working-papers/how-portfolios-evolve-after-retirement-the-effect-of-health-shocks/
    Download Restriction: no

    References listed on IDEAS

    as
    1. Marjorie Honig & Giora Hanoch, 1985. "Partial Retirement as a Separate Mode of Retirement Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 20(1), pages 21-46.
    2. Willem Saris, 2001. "The Relationship between Income and Satisfaction: The Effect of Measurement Error and Suppressor Variables," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 53(2), pages 117-136, February.
    3. Constantijn (Stan) Panis, 2003. "Annuities and Retirement Satisfaction," Working Papers DRU-3021, RAND Corporation.
    4. Keith A. Bender, 2004. "The Well-Being of Retirees: Evidence Using Subjective Data," Working Papers, Center for Retirement Research at Boston College wp2004-24, Center for Retirement Research.
    5. Alan L. Gustman & Thomas Steinmeier, 2007. "Projecting Behavioral Responses to the Next Generation of Retirement Policies," NBER Working Papers 12958, National Bureau of Economic Research, Inc.
    6. Steven Haider & David Loughran, 2001. "Elderly Labor Supply: Work or Play?," Working Papers 01-09, RAND Corporation.
    7. Jacob Arendt, 2005. "Income and “Outcomes” for Elderly: DO the Poor have A Poorer Life?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 70(3), pages 327-347, February.
    8. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    9. Alan L. Gustman & Thomas L. Steinmeier, 2000. "Retirement Outcomes in the Health and Retirement Study," NBER Working Papers 7588, National Bureau of Economic Research, Inc.
    10. Ed Diener & Robert Biswas-Diener, 2002. "Will Money Increase Subjective Well-Being?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 119-169, February.
    11. Ruhm, Christopher J, 1990. "Bridge Jobs and Partial Retirement," Journal of Labor Economics, University of Chicago Press, vol. 8(4), pages 482-501, October.
    12. Esteban Calvo, 2006. "Does Working Longer Make People Healthier and Happier," Work Opportunity Briefs wob_2, Center for Retirement Research.
    13. Y. Chan & Rance Lee, 2006. "Network Size, Social Support and Happiness in Later Life: A Comparative Study of Beijing and Hong Kong," Journal of Happiness Studies, Springer, vol. 7(1), pages 87-112, March.
    14. Susann Rohwedder, 2006. "Self-Assessed Retirement Outcomes: Determinants and Pathways," Working Papers wp141, University of Michigan, Michigan Retirement Research Center.
    15. Kelly M. Everard & Helen W. Lach & Edwin B. Fisher & M. Carolyn Baum, 2000. "Relationship of Activity and Social Support to the Functional Health of Older Adults," Journals of Gerontology: Series B, Gerontological Society of America, vol. 55(4), pages 208-212.
    16. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    17. Karl-Siegbert Rehberg, 2000. "The Fear of Happiness Anthropological Motives," Journal of Happiness Studies, Springer, vol. 1(4), pages 479-500, December.
    18. Sheung-Tak Cheng & Alfred C. M. Chan, 2006. "Relationship With Others and Life Satisfaction in Later Life: Do Gender and Widowhood Make a Difference?," Journals of Gerontology: Series B, Gerontological Society of America, vol. 61(1), pages 46-53.
    19. Patrick Royston, 2004. "Multiple imputation of missing values," Stata Journal, StataCorp LP, vol. 4(3), pages 227-241, September.
    20. Steven Haider & David S Loughran, 2001. "Elderly Labor Supply Work or Play?," Working Papers DRU-2582, RAND Corporation.
    21. Alex Michalos, 1985. "Multiple discrepancies theory (MDT)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 16(4), pages 347-413, May.
    22. Richard Easterlin, 2001. "Life Cycle Welfare: Trends and Differences," Journal of Happiness Studies, Springer, vol. 2(1), pages 1-12, March.
    23. Constantijn W.A. Panis, 2003. "Annuities and Retirement Satisfaction," Working Papers 03-17, RAND Corporation.
    24. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
    25. Robert Hutchens, 2007. "Phased Retirement: Problems and Prospects," Work Opportunity Briefs wob_8, Center for Retirement Research, revised Feb 2007.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jody Schimmel & David C. Stapleton, 2010. "Protecting the Household Incomes of Older Workers with Significant Health-Related Work Limitations in an Era of Fiscal Responsibility," Working Papers wp244, University of Michigan, Michigan Retirement Research Center.
    2. Datta Gupta, Nabanita & Larsen, Mona, 2007. "Health Shocks and Retirement: The Role of Welfare State Institutions," MPRA Paper 15497, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crr:crrwps:wp2005-17. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Grzybowski) or (Christopher F Baum). General contact details of provider: http://edirc.repec.org/data/crrbcus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.