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Buffering Shocks to Well-Being Late in Life
by Matthew D. Shapiro
WP 2009-211
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- Spending by older Americans is fairly well-insulated from poor health or losing a spouse.
- Having an additional chronic diagnosis has no direct effect on the level of non-medical spending, even though it leads to a substantial increase in out-of-pocket medical expenses.
- Self-reported poor health depresses non-medical spending noticeably, because poor health reduces the desire to spend.
- Surviving spouses experience a 25 to 30 percent decline in household consumption upon being widowed, which is about what a single individual consumes.
- Women and men experience similar declines in spending following the loss of a spouse despite the fact that women’s income falls more than men’s.
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