Working Paper: NBER ID: w26879
Authors: John Bailey Jones; Mariacristina De Nardi; Eric French; Rory McGee; Rachel Rodgers
Abstract: Using data from the Health and Retirement Survey, we document the changes in assets that occur before a person's death. Applying an event study approach, we find that during the 6 years preceding their deaths, the assets of single decedents decline, relative to those of similar single survivors, by an additional $20,000 on average. Over the same time span, the assets of couples who lose a spouse fall, relative to those of similar surviving couples, by an additional $90,000 on average. Households experiencing a death also incur higher out-of-pocket medical spending and other end-of-life expenses. This elevated spending is sufficient to explain (in accounting terms) the asset declines observed for singles but falls short of explaining the declines observed for couples. Bequests from the dying spouse to non-spousal heirs such as children are more than sufficient to explain the remainder.
Keywords: medical spending; bequests; asset dynamics; end-of-life expenses; retirement savings
JEL Codes: D1; D12; D14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| death (B32) | asset decline for singles (G51) |
| death (B32) | asset decline for couples (J12) |
| elevated medical spending (H51) | asset decline for singles (G51) |
| death (B32) | elevated medical spending (H51) |
| bequests from dying spouse (D14) | asset decline for couples (J12) |
| death (B32) | changes in consumption patterns (D12) |