Leveraging Free Public Use Data for Aging and Life Course Research

This symposium will showcase life course and aging research that is possible using freely available integrated census and survey data available via IPUMS. This session is organized by the Network for Data-Intensive Research on Aging (NDIRA) initiative at the University of Minnesota’s Life Course Center. NDIRA seeks to build and support an interdisciplinary community of scientists leveraging powerful data resources in innovative ways to understand health outcomes at older ages, as well as the demography and economics of aging. The session features papers that illustrate how to examine aging-related topics including health at older ages, work and socioeconomic conditions, and living conditions with a common thread of examining heterogeneity within groups. These papers all leverage freely available census and nationally-representative survey data, highlighting the potential value of these data for studying aging and the life course. By combining papers on an array of topics from a variety of data sources, this symposium highlights exemplar papers that demonstrate the types of novel research possible using public use census and survey data that NDIRA seeks to foster.

Economic Uncertainties in Retirement: Risk Factors, Strategies, and Resilience

Even with forethought and planning, a lot can threaten economic wellbeing in the years ahead for older adults retiring at typical retirement ages. Although results for any individual cannot be predicted with certainty, some risks are quantifiable: for example, mortality/ longevity and disability risks are reasonably well-defined. Risk of dementia is not so well understood, and may be changing. Financial risk might be seen as manageable, but older adults relying on retirement income sources can be especially vulnerable to unprecedented shocks to the general economy. We consider four aspects of this dilemma. First, older adults retiring with outstanding debts may have difficulty weathering financial shocks. Our first presentation provides up-to-date information about trends in indebtedness at older ages, especially focusing on newly salient types of indebtedness: medical and student loan debt, and debt incurred to smooth finances in the recent recession. Stewardship of finances during retirement can be a challenging personal management undertaking. Our second presentation will consider how dementia can complicate this process. Protection against outliving one’s resources is more complex and costlier in the era of defined contribution retirement accounts. Our third presentation will discuss strategies to combine retirement assets, including Social Security claiming, to hedge longevity risk. Finally, needs for long-term services and supports may be met with either paid or informal (family) care, or both, but cannot be predicted with certainty. Our fourth presentation examines the long-term impacts on families due to the difficulty in insuring against this risk. Economics of Aging Interest Group Sponsored Symposium.

The Financial Presentation of Alzheimer’s Disease and Related Dementias

Dementia, a currently incurable degenerative cognitive disease, represents a major threat to financial stability. Early signs of dementia can include difficulties managing money and forgetting to pay bills, raising concerns about the implications of pre-clinical disease for financial well-being. We linked Medicare claims data to 20 years of consumer credit data for more than 80,000 older Americans living in single households to study the financial presentation of Alzheimer’s Disease and Related Dementias. Using non-parametric regression models, we find elevated rates of payment delinquency, subprime credit, and withdrawal from use of credit products up to 6 years before dementia is clinically diagnosed. Similar patterns did not appear with a number of placebo acute and chronic health conditions, suggesting that the adverse financial events are unique to dementia and do not occur with other acute or chronic illnesses. Part of a symposium sponsored by the Economics of Aging Interest Group.

Addressing Longevity Risk: How Best to Annuitize Defined Contribution Assets?

Unlike defined benefit pensions, 401(k) plans provide little guidance on how to turn accumulated assets into income. The key risk that retirees face is outliving their assets. Insurance against such risk is available through several routes, including immediate annuities, deferred annuities, and additional Social Security through delayed claiming. Under this Social Security bridge option, participants would tap their 401(k) for payments equal to their Social Security to delay claiming. This paper compares these three options in simulations against a baseline in which no assets are used to obtain lifetime income. In each option, assets not allocated to purchasing lifetime income are consumed following the Required Minimum Distribution rules. The analysis finds that, when market and health shocks are included alongside longevity uncertainty, the Social Security bridge option is generally the best for households with median wealth. Wealthier households can benefit from combining the bridge option with a deferred annuity. Part of a symposium sponsored by the Economics of Aging Interest Group.

Family Spillovers and Long-Term Care Insurance

We examine how the presence of long-term care insurance (LTCI) spills over to family outcomes, including informal care, co-residence, and labor supply of adult children. We instrument for long-term care insurance with changes in state tax policies to address the endogeneity of LTCI coverage. We find that for tax-filing families in the top third of the income distribution, LTCI coverage leads to a 50 percent reduction the parents’ perceptions of the willingness of people to care for them in the future, including their adult children. We also find that LTCI causes changes in the residential decisions of adult children, with lower co-residence rates and higher likelihood of living within 10 miles of the parent. We also find small decreases in part-time work among adult children. Our findings provide empirical support for the presence of family spillovers of LTCI on the economic behaviors of family members. Part of a symposium sponsored by the Economics of Aging Interest Group.

Patterns of Healthy Aging and Household Size Dynamics in Western Europe

The diversity of family structures and the quality of social relationships are closely tied to one another. Individual characteristics such as parenting, grandparenting, partnership, cohabitation, living apart together, living solo and other contextual factors (for instance intergenerational help and care) shape partnership histories related to health dynamics; these histories vary greatly depending on gender and country. Over the last 20 years, researchers have considered the Northern Europe as a region of weak family ties and the Southern Europe as a region of strong family ties. This study interprets the household size as an age-related factor and focuses on two empirical questions: (1) Are there gender differences related to health patterns, and how do they change over time? (2) What kind of country-specific differences in the household size dynamics can be observed among West European men and women in the second part of life? The study uses descriptive elements of sequence analysis and regression analysis based on the panel data from seven waves of the SHARE project (Survey of Health, Ageing and Retirement in Europe) collected between 2004 and 2017. The study shows that there are gender differences in the life-course transition to a single-person household. This type of household become more common with time and with individual’s increasing age. The statistical patterns can be helpful in identifying those life stages that are crucial to stabilization of functional health within the context of demographic change. Ethics statement. The SHARE project has been running since 2002. It was originally established at the Mannheim Research Institute for the Economics of Aging (MEA) of the University of Mannheim. Since 2011, it is being operated under the umbrella of the Max Planck Society at the Max Planck Institute for Social Law and Social Policy and is centrally coordinated by the Munich Center for the Economics of Aging. The SHARE study was subject to several ethics reviews: The Ethics Committee of the University of Mannheim, Ethics Council of the Max Planck Society and by national ethics committees. This study was conducted in full accordance with the World Medical Association (WMA) (Declaration of Helsinki, last revised at the 64th WMA Meeting held in Fortaleza, Brazil in October 2013). Written consents from all participants involved in this study were obtained.