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Older Americans’ health and the Great Recession

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Abstract

We use 2009 American Association for Retired Persons and Medical Expenditure Panel Survey (MEPS) data to determine how older Americans respond to job loss, decreases in housing and financial wealth, and threats to health insurance. Some respond by leaving prescriptions unfilled, postponing needed health care, and/or stopping 401K contributions. The MEPS confirms our conclusions about the importance of job loss and health insurance for those 45 years old and older. Furthermore, direct measures of mental well-being from the MEPS demonstrate the negative impact of the Great Recession. Overall, our study fills a gap in the economics literature on the well-being of older citizenry during economic recession.

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Notes

  1. http://www.federalreserve.gov/releases/z1/Current/z1-5.pdf.

  2. Although we did construct measures of premium increases, our empirical analysis suggested that in most cases the increases were due to the expansion of benefits. Since the MEPS data do not contain detailed benefit infomation, we were only able to infer whether this was indeed the case.

  3. Although the MEPS suggests that 29 % of families had a reduction in income of 20 % or more, the AARP survey suggests that only 20 % of families lost income. However, these measures are actually consistent since having a reduction in income or work hours is conditional upon having a job in the AARP survey. Indeed, 32 % of those in the AARP survey either lost income or a job.

  4. In our sample, the variables lost health coverage, unrelated to the downturn and losthealth, related to the downturn are orthogonal and hence convey different information.

  5. On the other hand, an implication of ex-ante moral hazard is that those who lose health insurance will be inclinded to take better care of their overall health. If so, then losing health insurance might make dropping a gym membership less likely; see Pauly (1974). Yet, since less expensive forms of exercise (such as walking or jogging) are substitutes for a gym regimen, then keeping a gym membership should still largely be driven by income considerations. Of course, if losing health insurance has a large, negative income effect, then dropping a gym membership may be more likely.

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Acknowledgments

We thank the American Association for Retired Persons (AARP) for sharing data related to our study, and in particular Gerard (Chuck) Rainville who was instrumental in helping us gain access. We also thank two anonymous referees for valuable comments and suggestions.

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Authors and Affiliations

  1. Rauch Business Center, Lehigh University, 621 Taylor Street, Bethlehem, PA, 18015-3117, USA

    Thomas J. Hyclak, Chad D. Meyerhoefer & Larry W. Taylor

  2. NBER, Cambridge, MA, USA

    Chad D. Meyerhoefer

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  1. Thomas J. Hyclak
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  2. Chad D. Meyerhoefer
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Correspondence to Larry W. Taylor.

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Hyclak, T.J., Meyerhoefer, C.D. & Taylor, L.W. Older Americans’ health and the Great Recession. Rev Econ Household 13, 413–436 (2015). https://doi.org/10.1007/s11150-013-9197-6

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  • DOI: https://doi.org/10.1007/s11150-013-9197-6

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