CEPRA/NBER Conference on Aging and Health

June 1-3, 2017
Fabrizio Mazzonna, Università della Svizzera Italiana; Jonathan S. Skinner of Dartmouth College; and Massimo Filippini of ETH Zurich and Unversità della Svizzera Italiana, Organizers

Mathilde C.M. Godard, GATE-LSE, CNRS, the University of Lyon, and Pierre Koning and Maarten Lindeboom, Vrije Universiteit Amsterdam

Screening Disability Insurance Applications and Targeting

This paper, by Lindeboom, Godard and Koning, analyzes the effects of health screening on disability insurance applications and labor market outcomes, based on a policy reform requiring more stringent health screening in the Netherlands – the so-called "Gatekeeper Protocol." The authors find that the more stringent screening required in selected regions had a significantly negative effect on disability insurance applications and inflows, particularly from those applying based on mental disorders. The treated and control cohorts were followed for eight years. Among those subject to stringent screening, the authors find elevated mortality risk in the pool of applicants, but not in the pool of non-applicants. This suggests that the policy improved the targeting of DI benefits to those in poorer health.

Corina D. Mommaerts, the University of Wisconsin at Madison

Long-Term Care Insurance and the Family

In this study, Mommaerts analyzes the degree to which informal care by family members reduces demand for long-term care insurance. The findings from a dynamic model of long-term care decisions between an elderly parent and her adult child suggest that the availability of informal care lowers the demand for insurance by 14 percentage points. The study also estimates the effect of alternative long-term policies that compensate families for informal care. The results show that such policies can generate substantial increases in insurance demand and family welfare, as well as reductions in Medicaid spending.

Fabrizio Mazzonna, and Osea Giuntella, the University of Pittsburgh

Sunset Time and the Economic Effects of Social Jetlag: Evidence from US Time Zone Borders

In this study, Giuntella and Mazzonna describe "social jetlag" as the misalignment between social and biological rhythms. Examples of social rhythms are work and school schedules. Examples of biological rhythms are sunrise and sunset times. When these rhythms are misaligned, sleep may suffer, with consequent effects on health and economic outcomes. The study analyzes the effects of misalignment by comparing outcomes on either side of time-zone boundaries. What the authors find is large negative effects on sleep, health, and wages. An extra hour of natural light in the evening, for example, reduces sleep duration by an average of 19 minutes and increases the likelihood of reporting insufficient sleep. Also affected are per capita wages and health outcomes, such as obesity, diabetes, cardiovascular diseases, and breast cancer.

Marika Cabral, the University of Texas at Austin and NBER, and Mark R. Cullen, Stanford University and NBER

Estimating the Value of Public Insurance Using Complementary Private Insurance (NBER Working Paper No. 22583)

In this study, Cabral and Cullen develop an innovative approach to estimate how much people collectively value publicly-provided insurance benefits, based on people's observed behavior in complementary private markets that supplement the public coverage. The study then uses these methods to estimate the welfare value of publicly-provided disability insurance, computed using administrative data on disability insurance. The findings suggest that for the sample population, public disability insurance provides a collective social value that exceeds its cost. This surplus suggests that there may be even greater gains from more generous coverage.

Pieter Bakx, Institute of Health Policy & Management, Erasmus University Rotterdam; Bram Wouterse, CPB Netherlands Bureau for Economic Policy Analysis; Eddy Van Doorslaer, Erasmus School of Economics, Erasmus University Rotterdam; and Albert Wong, National Institute for Public Health and the Environment

The Health Effects of a Nursing Home Admission

In this study, Bakx, Wouterse, van Doorslaer and Wong compare the effects on health and costs of care among those admitted to nursing homes, rather than receiving home-based long-term care services. The study takes advantage of the financing system for long-term care services in the Netherlands, where eligibility for publicly-financed nursing home benefits is determined by a randomly assigned assessor with substantial discretionary authority. Because assessors differ in their tendency to approve an applicant's request for nursing home benefits, one can indirectly analyze the effects of nursing home admission by comparing outcomes for applicants with more and less lenient assessors. Using this method, the authors find that being eligible for nursing home care has no effect on mortality. The authors also find that the costs of a nursing home admission is completely offset by lower spending on home care and medical care, driven in part by a sharp drop in the likelihood of a hospital admission among those admitted to nursing homes.

Teresa Bago d'Uva and Owen O'Donnell, Erasmus University Rotterdam, and Eddy Van Doorslaer, Erasmus School of Economics, Erasmus University Rotterdam

Who Can Predict Their Own Demise? Heterogeneity in the Accuracy of Longevity Expectations

Inaccurate longevity expectations can lead to suboptimal decisions about saving, long-term care insurance purchases and other preparations for later life. In this study, Bago d'Uva, O'Donnell and van Doorslaer evaluate the accuracy of people's mortality expectations in the Health and Retirement Study. They compare respondents' stated probability of living to age 75 with actual survival rates. The study finds that, on average, survival predictions are poor and downwardly biased. Men predict less accurately than women, but women underestimate their survival chances more than men. Predictions are least accurate among those with less education and poorer cognitive functioning. The study's modelling suggests that welfare would be higher if people made decisions based on base survival rates, rather than on their reported individual-specific survival expectations.

Itzik Fadlon, the University of California at San Diego and NBER, and Torben Heien Nielsen, the University of Copenhagen

Family Health Behaviors

This paper, by Fadlon and Neilsen, analyzes how people's health behaviors change when family members have adverse health events. It considers health events experienced by family members both within and across generations. The study finds that spouses and adult children immediately increase their health investments and improve their health behaviors in response to family shocks, and that these effects are both significant and persistent for at least several years. Exploiting the detailed nature of the data, the authors consider a variety of mechanisms influencing these behavioral changes, and highlight the salience of health risks as an important factor.

Nicole Maestas, Harvard University and NBER, and Kathleen Mullen and David Powell, RAND Corporation

The Effect of Population Aging on Economic Growth, the Labor Force and Productivity (NBER Working Paper No. 22452)

In this study, Maestas, Mullen and Powell consider how an aging population affects economic productivity and growth. Their methodology takes advantage of the wide variation in demographic trends across states, and analyzes how the growth rate of a state's older population relates to economic performance measures. The study finds that a 10% increase in the fraction of the population aged 60 and older decreases per capita GDP by 5.5%. Two-thirds of the reduction is due to slower growth in labor productivity across the age distribution, while one-third arises from slower labor force growth.

Amitabh Chandra, Harvard University and NBER, and Douglas Staiger, Dartmouth College and NBER

Predicting the Impact of Hospital Closures on Patient Outcomes

Measures of hospital quality are often constructed from risk-adjusted mortality, risk-adjusted spending, and patient readmissions rates, among other factors. Critics claim that this approach is limited because it does not account for confounders such as patient behavior and socioeconomic circumstance. In this study, Chandra and Staiger consider whether confounding factors invalidate this approach to quality measurement. They note that if quality measures are invalidated by confounding factors, then the closing of high versus low mortality hospitals shouldn't predict subsequent patient outcomes. Using a sample of several million Medicare patients hospitalized for 5 major conditions, they find that the closing of high versus low mortality hospitals does affect subsequent outcomes. The conclude, therefore, that hospital quality measures using risk-adjusted Medicare claims data are in fact highly validated measures of hospital performance.

Florian Heiss, the University of Dusseldorf; Daniel L. McFadden, the University of California at Berkeley and NBER; Lauren Scarpati, the University of South California; and Joachim Winter and Amelie C. Wuppermann, the University of Munich

The Housing Crisis of the Late 2000s and Causal Paths between Health and Socioeconomic Status

The health-wealth gradient, wherein the affluent are healthier than those with fewer financial resources, has been well-documented. However, the causal direction of this relationship is not firmly established. In this study, Heiss, McFadden, Scarati, Winter and Wuppermann analyze changes in home prices during the recent housing crisis as a natural experiment for evaluating the effect of changes in wealth on health. Did health outcomes, such as chronic conditions, change due to large, rapid changes in home prices? Further, did patients curb their use of medical services like non-urgent hospitalizations, office visits, prescription drug use, and preventive care? Based on a sample of nine million Medicare beneficiaries, the study finds effects on both health care utilization and morbidity outcomes. Beneficiaries respond to decreases in wealth by increasing their use of health care and selected preventive services, which goes in hand with increases in Medicare costs as well as detection of chronic conditions.

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