Working Paper: CEPR ID: DP16155
Authors: Mariacristina De Nardi; Eric Baird French; John Bailey Jones; Rory McGee
Abstract: While the savings of retired singles tend to fall with age, those of retired couples tend to rise. We estimate a rich model of retired singles and couples with bequest motives and uncertain longevity and medical expenses. Our estimates imply that while medical expenses are an important driver of the savings of middle-income singles, bequest motives matter for couples and high-income singles, and generate transfers to non-spousal heirs whenever a household member dies. The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees. Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.
Keywords: savings; singles; couples; bequest motives; medical expenses
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bequest motives (D64) | savings behavior (D14) |
| medical expenses (H51) | savings behavior (D14) |
| death of a spouse (J12) | savings behavior (D14) |
| medical expenses + bequest motives (D14) | savings behavior (D14) |
| death of a spouse (J12) | net worth (G19) |
| absence of bequest motives (D14) | wealth held by widows and widowers (D14) |
| savings patterns of singles vs couples (D14) | savings behavior (D14) |
| couples save for surviving spouse (D14) | savings behavior (D14) |
| bequest motives + medical expenses (D14) | savings behavior (D14) |