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Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men

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  • Wunder, Christoph

    (Martin-Luther University, Halle-Wittenberg)

  • Schwarze, Johannes

    (University of Bamberg)

Abstract

Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that women's utility is higher if they are married. Thus, extending the lifespan of men would benefit women. Using life satisfaction data from the German Socio-Economic Panel Study (SOEP), we conduct an empirical test of this assumption. We apply a two-step estimation strategy: first, we use a propensity score matching approach to generate a control group of non-widowed women. The average level of life satisfaction in the control group serves as a reference to measure the degree of adaptation to widowhood. In the second step, the life satisfaction trajectories of both groups are estimated using penalized spline regressions. The results suggest bereavement has no enduring effect on life satisfaction, and that falsifies Posner's assumption.

Suggested Citation

  • Wunder, Christoph & Schwarze, Johannes, 2009. "Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men," IZA Discussion Papers 4485, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4485
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    1. Should old women pay for the health of old men?
      by Economic Logician in Economic Logic on 2009-12-15 09:34:00

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    1. Christoph Wunder & Johannes Schwarze, 2010. "What (If Anything) Do Satisfaction Scores Tell Us about the Intertemporal Change in Living Conditions," SOEPpapers on Multidisciplinary Panel Data Research 306, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    widowhood; adaptation; subjective well-being; life satisfaction; penalized spline regression; propensity score matching;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D10 - Microeconomics - - Household Behavior - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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