This article studies the financial decision-making behavior of U.S. families that have difficulties paying for their medical bills and investigate what alternatives they have to avoid filing for formal bankruptcy and what influence their motivation to do so. Using household financial and demographic information from the Health Tracking Household Survey in 2007 and 2010, this article finds that families with younger age members, minority ethnic background, more doctor visits, and without insurance made more diverse and severe choices to finance the payments before resorting to personal bankruptcy. Interestingly, households with better education seek more diverse but easier financing methods, suggesting that financial literacy may play a dual role in undertaking financial planning—strategic default and bankruptcy avoiding.
Informal Bankruptcy: Health Expenditure Shocks and Financial Distress Avoidance by G. Nathan Dong :: SSRNOctober 19, 2018
The Relationship between Reverse Mortgage Borrowing, Domain and Life Satisfaction by Cäzilia Loibl, Donald R. Haurin, Julia Brown, Stephanie Moulton :: SSRNOctober 19, 2018
Objectives: Reverse mortgages allow adults aged 62 and older to borrow against the equity in their homes without incurring monthly loan repayments.
This study examines the relationship of reverse mortgage borrowing with older adults’ satisfaction with their financial situation, housing, health, and daily life/leisure as well as with life as a whole.
Method: A new national data set of 1,088 older adults, comprised of loan data, credit histories, and responses to a phone survey, was created. Our estimation strategy compares reverse mortgage borrowers to older adults who obtained mandatory counseling but not a reverse mortgage.
Results: Reverse mortgage borrowers have significantly higher financial and housing satisfaction compared to non-borrowers; no differences were found for health, daily life/leisure, and general satisfaction. These satisfaction domains contribute differently to general satisfaction for reverse mortgage borrowers relative to non-borrowers: housing satisfaction has a greater influence for borrowers and health a greater influence for non-borrowers.
Discussion: Our study provides new knowledge about the longer-term outcomes of reverse mortgage borrowers. The positive association of reverse mortgage borrowing for housing and financial satisfaction and, in turn, general satisfaction, provides insights regarding borrower experiences with this controversial financial tool.
Are Two Bads Better than One? A Model of Sensory Limitations by Lars John Lefgren, Olga Stoddard, John E. Stovall :: SSRNOctober 18, 2018
We present a theoretical framework which explains the optimizing behavior of individuals who are exposed to many latent stimuli but prone to experience only the most salient one. We show that individuals with such preferences may find it optimal to engage in seemingly dysfunctional behavior such as self-harm. Our model also explains the behavior of individuals experiencing depression or trapped by multiple competing problems. We present experimental evidence suggesting such preferences explain the behavior of more than two thirds of subjects exposed to single and multiple painful stimuli.
Numerous studies have examined the health effect of retirement, retirement behavior, and not having assets saved for retirement, however, few have analyzed the mental health effects of running out of money during retirement. This study examines the likelihood of having mental health issues in retirement when an individual runs out of money. This research article utilizes five waves of the Health and Retirement Study, spanning from 2006 through 2014. The result suggests that individuals who are going to run out of money two years from now have an increase in the probability of having mental health issues. However, there is an even further increase in the likelihood of mental health issues when the individual actually has actually run out of money. The larger the drop in asset level (ex. $25,000 down to below $1,000 vs $5,000 down to below $1,000) the large probability of having mental health issues. With the United States currently living longer and choosing to retire earlier there increased the risk of running out of money in retirement. Which leads to an increased risk of having mental health issues throughout retirement.
Rich Man, Poor Man: The Policy Implications of Canadians Living Longer by Kevin S. Milligan, Tammy Schirle :: SSRNSeptember 16, 2018
A longevity gap between rich and poor has persisted over the years in Canada with significant policy implications, according to a new report from the C.D. Howe Institute. In “Rich Man, Poor Man: The Policy Implications of Canadians Living Longer” – the first study of long-term changes in longevity across earnings groups in Canada – authors Kevin Milligan and Tammy Schirle provide new evidence on the incomes and life expectancy of Canadians.
By 2013, the average Medicare beneficiary’s out-of-pocket spending on health care consumed 41 percent of the average Social Security check, according to Kaiser, which also estimated that the figure would rise.
Estimating the Effects of Subsidized School Meals on Child Health: Evidence from the Community Eligibility Provision in Georgia SchoolsMay 29, 2018
For many children in the United States, school meals represent a vital source of reliable and nutritious food. Utilizing variation caused by the Community Eligibility Provision (CEP) in Georgia schools, we estimate models of school-level child health measured by the percentage of healthy weight children and average Body Mass Index (BMI) score. CEP eligibility is used as an instrument for CEP participation and the percentage of students enrolled in free and reduced-price school lunches, as well as in the reduced form. We find that CEP participation increases the percentage of healthy weight students in a school and reduces average BMI. We find no statistically significant evidence to support a deleterious effect from either the CEP or free school meals on child health outcomes. Subsample analyses suggest that that the effect of school meals on health varies across grade and location type, with no effect on high schools or rural schools.