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Buffering Shocks to Well-Being Late in Life
by Matthew D. Shapiro
WP 2009-211
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- Consumption by older Americans is fairly well-insulated from poor health or losing a spouse.
- Consumption falls 25 to 30 percent upon being widowed, dropping to the level of what a single individual consumes.
- Women and men experience similar declines in consumption following the loss of a spouse, yet women’s income falls more than men’s.
- 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.
- However, self-reported poor health depresses non-medical spending noticeably, because poor health reduces the desire to spend.
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