Health and (Other) Asset Holdings

Hugonnier, Julien; Pelgrin, Florian; St‐Amour, Pascal

doi:10.2139/ssrn.1362399

Cited by 40 publications

(71 citation statements)

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“…Individual features of the model have appeared in the literature. For example, several papers allow health expenditure to respond endogenously to health shocks, but they do not model housing or portfolio choice (Picone et al, 1998; Hugonnier et al, 2013). Several papers study housing and portfolio choice during the working phase when households face labor-income risk, instead of retirement when they face health risk (Cocco, 2005; Hu, 2005; Yao and Zhang, 2005).…”

Section: Life-cycle Model Of Consumption and Portfolio Choice In Rmentioning

confidence: 99%

Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets

Yogo

2016

Journal of Monetary Economics

214

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In a life-cycle model, a retiree faces stochastic health depreciation and chooses consumption, health expenditure, and the allocation of wealth between bonds, stocks, and housing. The model explains key facts about asset allocation and health expenditure across health status and age. The portfolio share in stocks is low overall and is positively related to health, especially for younger retirees. The portfolio share in housing is negatively related to health for younger retirees and falls significantly in age. Finally, out-of-pocket health expenditure as a share of income is negatively related to health and rises in age.

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Section: Life-cycle Model Of Consumption and Portfolio Choice In Rmentioning

confidence: 99%

Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets

Yogo

2016

Journal of Monetary Economics

214

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“…On the other hand, the simultaneous determination of health and employment could result from common (unobserved) drivers of both 1 See Ozkan (2014), Fonseca et al (2009), Blau andGilleskie (2008), Pelgrin and St-Amour (2016), Cole et al (2012), Hai (2015), Halliday et al (2017), Hugonnier et al (2012), and Scholz and Seshadri (2016).…”

Section: Literaturementioning

confidence: 99%

The impact of health on labour supply near retirement

Blundell¹,

Britton²,

Dias³

et al. 2017

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Estimates of the effect of health on employment differ significantly from study to study due to differences in method, data, institutional background and health measure. We assess the importance of these differences using a unified framework to interpret and contrast estimates of the impact of health on employment based on various measures of health and estimation procedures. This is done for the US and England. We find that subjective and objective health measures, as well as subjective measures instrumented by objective measures produce similar estimates if a sufficiently large number of objective measures is used. Reducing the number of objective measures used compromises their ability to capture work capacity and biases estimates downwards. Failure to account for initial conditions leads to an overstatement of the effect of health on employment. We also find that a carefully constructed single index of subjective health yields estimates that are very similar to those obtained with multiple measures. Overall, declines in health can explain between 3% and 15% of the decline in employment between ages 50 and 70. These effects are larger among high-school dropouts and tend to drop with education; they are also larger in the US than in England. Finally, cognition has little added explanatory power once we also control for health, suggesting that cognition is not a key driver of employment at these ages. I10, J26, E24

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“…See Galama, Hullegie, Meijer and Outcault (2012) for a first attempt at estimating a linearized equation derived from the more general (non-degenerate) version of the Grossman model. A more recent literature has solved and estimated dynamic formulations (sometimes loosely) based on health-capital theory using dynamic programming techniques, and taking into account a health investment process that is subject to decreasing returns to scale (e.g., Gilleskie, 1998;Ehrlich and Yin, 2005;Yogo, 2009;Khwaja, 2010;Scholz and Seshadri, 2012;Fonseca et al 2013;Hugonnier et al 2013). …”

Section: Toward a Theory Of Health Inequalitymentioning

confidence: 99%

Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions

Galama¹,

Kippersluis²

2013

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We explore what health-capital theory has to offer in terms of informing and directing research into health inequality. We argue that economic theory can help in identifying mechanisms through which specific socioeconomic indicators and health interact. Our reading of the literature, and our own work, leads us to conclude that non-degenerate versions of the Grossman model (1972a;b) and its extensions can explain many salient stylized facts on health inequalities. Yet, further development is required in at least two directions. First, a childhood phase needs to be incorporated, in recognition of the importance of childhood endowments and investments in the determination of later-life socioeconomic and health outcomes. Second, a unified theory of joint investment in skill (or human) capital and in health capital could provide a basis for a theory of the relationship between education and health.

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Health and (Other) Asset Holdings

Cited by 40 publications

References 0 publications

Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets

Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets

The impact of health on labour supply near retirement

Health Inequalities through the Lens of Health Capital Theory: Issues, Solutions, and Future Directions

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