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Buffering Shocks to Well-Being Late in Life


  • Matthew D. Shapiro

    (University of Michigan and NBER)


Consumption provides a comprehensive measurement of economic well-being. This research shows that consumption is well-insured with respect to health status and widowing. Using data from the Health and Retirement Study (HRS) and its CAMS supplement, it shows that consumption responds little to changes in health status even though adverse health generates substantial out-of-pocket medical expenses. Similarly, the effect of widowing on consumption, though substantial, is not strongly driven by changes in economic resources. Men experience little loss of monetary resources when being widowed. Women have the same overall loss in consumption as men when being widowed despite greater declines in economic resources. Hence, despite the adverse consequences for income and wealth for female widows, women experience no greater drop in consumption from losing a spouse than do men.

Suggested Citation

  • Matthew D. Shapiro, 2009. "Buffering Shocks to Well-Being Late in Life," Working Papers wp211, University of Michigan, Michigan Retirement Research Center.
  • Handle: RePEc:mrr:papers:wp211

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    References listed on IDEAS

    1. van Soest, Arthur & Delaney, Liam & Harmon, Colm P. & Kapteyn, Arie & Smith, James P., 2007. "Validating the Use of Vignettes for Subjective Threshold Scales," IZA Discussion Papers 2860, Institute for the Study of Labor (IZA).
    2. Arie Kapteyn & James P. Smith & Arthur van Soest & James Banks, 2010. "Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences," NBER Chapters,in: Research Findings in the Economics of Aging, pages 63-92 National Bureau of Economic Research, Inc.
    3. repec:cup:apsrev:v:97:y:2003:i:04:p:567-583_00 is not listed on IDEAS
    4. Arie Kapteyn & James P. Smith & Arthur van Soest, 2007. "Vignettes and Self-Reports of Work Disability in the United States and the Netherlands," American Economic Review, American Economic Association, vol. 97(1), pages 461-473, March.
    5. repec:cup:apsrev:v:98:y:2004:i:01:p:191-207_00 is not listed on IDEAS
    6. Kreider, Brent & Pepper, John V., 2007. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Journal of the American Statistical Association, American Statistical Association, vol. 102, pages 432-441, June.
    7. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
    8. Arie Kapteyn & James P. Smith & Arthur van Soest, 2005. "Self-reported Work Disability in the US and The Netherlands," Labor and Demography 0504006, EconWPA.
    9. Petri Böckerman & Pekka Ilmakunnas, 2009. "Unemployment and self-assessed health: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 161-179.
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