American Economic Journal: Macroeconomics: Vol. 6 No. 3 (July 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro Forthcoming Articles

The Impact of Medical and Nursing Home Expenses on Savings

Article Citation

Kopecky, Karen A., and Tatyana Koreshkova. 2014. "The Impact of Medical and Nursing Home Expenses on Savings." American Economic Journal: Macroeconomics, 6(3): 29-72.

DOI: 10.1257/mac.6.3.29

Abstract

We consider a life-cycle model with idiosyncratic risk in earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States we show that savings for old-age, out-of-pocket expenses account for 13.5 per- cent of aggregate wealth, half of which is due to nursing home expenses; cross-sectional out-of-pocket nursing home risk accounts for 3 percent of aggregate wealth and substantially slows down wealth decumulation at older ages; and all newborns would benefit if social insurance for nursing home stays was made more generous.

Article Full-Text Access

Full-text Article

Additional Materials

Authors

Kopecky, Karen A. (Federal Reserve Bank of Atlanta)
Koreshkova, Tatyana (CIREQ, Montreal and Concordia U)

JEL Classifications

D91: Intertemporal Household Choice; Life Cycle Models and Saving
E21: Macroeconomics: Consumption; Saving; Wealth
E62: Fiscal Policy
H51: National Government Expenditures and Health
I13: Health Insurance, Public and Private
I18: Health: Government Policy; Regulation; Public Health
J14: Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Macroeconomics


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Macro - All Issues

AEJ: Macro - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us