Kathleen McGarry

Evaluation of the Subjective Probabilities of Survival in the Health and Retirement Study

In the Health and Retirement Study respondents were asked about the chances they would live to 75 or to 85. We analyze these responses to determine if they behave like probabilities of survival, if their averages are close to average probabilities in the population, and if they have correlations with other variables that are similar to correlations with actual mortality outcomes. We find that generally they do behave like probabilities and that they do aggregate to population probabilities. Most remarkable, however, is that they covary with other variables in the same way actual outcomes vary with the variables. For example, respondents with higher socioeconomic status give higher probabilities of survival, whereas respondents who smoke give lower probabilities. We conclude that these measures of subjective probabilities have great potential use in models of intertemporal decision-making under uncertainty.

National Institutes of Health State-of-the-Science Conference statement: preventing alzheimer disease and cognitive decline.

The National Institute on Aging and the Office of Medical Applications of Research of the National Institutes of Health convened a State-of-the-Science Conference on 26-28 April 2010 to assess the available scientific evidence on prevention of cognitive decline and Alzheimer disease. This article provides the panels assessment of the available evidence.

Transfer Behavior in the Health and Retirement Study: Measurement and the Redistribution of Resources within the Family

Recent work by a number of economists has opened a debate about the role played by intergenerational transfers. Using the new Health and Retirement Study (HRS), we are better able to address the issues involved. Contrary to the current literature on bequests, we do not find that parents give transfers equally to all children. Rather, we find that in the case of inter-vivos transfers, respondents give greaterfinancial assistance to their less well off children than to their children with higher incomes. Financial transfers to elderly parents are also found to be negatively related to the (potential) recipients income. These results hold both for the incidence of transfers and for the amounts. In addition, we allow for unobserved differences across families by estimating fixed effect models and find our results to be robust to these specifications. A comparison of the HRS transfer data to other survey data demonstrates that the HRS is potentially quite useful for research on transfer behavior.

Inter vivos transfers and intended bequests

Empirical work on intergenerational transfers has focused on distinguishing between altruistic and exchange motivated behavior. However, these two models are unable to explain the strong tendency for estates to be divided equally across children, while inter vivos transfers are made unequally. This paper presents a new framework for analyzing transfers from parents to children that is more consistent with observed behavior than are the altruistic and exchange models alone. In particular the model developed here allows for differing behavior with respect to inter vivos transfers and bequests due to uncertainty about the recipients permanent income. The empirical work uses data from the Health and Retirement Survey and the Asset and Health Dynamics Survey. The patterns observed in these data are consistent with earlier findings that inter vivos transfers go disproportionately to less well-off children, while bequests are divided equally across children. Further, the results support the prediction of the model in that differences in inter vivos transfers arise from differences in current income, while bequests are unequal when the childrens permanent incomes are different.

Risk Factors and Preventive Interventions for Alzheimer Disease: State of the Science

BACKGROUND Numerous studies have investigated risk factors for Alzheimer disease (AD). However, at a recent National Institutes of Health State-of-the-Science Conference, an independent panel found insufficient evidence to support the association of any modifiable factor with risk of cognitive decline or AD. OBJECTIVE To present key findings for selected factors and AD risk that led the panel to their conclusion. DATA SOURCES An evidence report was commissioned by the Agency for Healthcare Research and Quality. It included English-language publications in MEDLINE and the Cochrane Database of Systematic Reviews from 1984 through October 27, 2009. Expert presentations and public discussions were considered. STUDY SELECTION Study inclusion criteria for the evidence report were participants aged 50 years and older from general populations in developed countries; minimum sample sizes of 300 for cohort studies and 50 for randomized controlled trials; at least 2 years between exposure and outcome assessment; and use of well-accepted diagnostic criteria for AD. DATA EXTRACTION Included studies were evaluated for eligibility and data were abstracted. Quality of overall evidence for each factor was summarized as low, moderate, or high. DATA SYNTHESIS Diabetes mellitus, hyperlipidemia in midlife, and current tobacco use were associated with increased risk of AD, and Mediterranean-type diet, folic acid intake, low or moderate alcohol intake, cognitive activities, and physical activity were associated with decreased risk. The quality of evidence was low for all of these associations. CONCLUSION Currently, insufficient evidence exists to draw firm conclusions on the association of any modifiable factors with risk of AD.

Medical insurance and the use of health care services by the elderly

The objective of this paper is to find how health insurance influences the use of health care services by the elderly. On the basis of the first wave of the Asset and Health Dynamics Survey, we find that those who are the most heavily insured use the most health care services. Because our data show little relationship between observable health measures and either the propensity to hold or to purchase private insurance, we interpret this as an effect of the incentives embodied in the insurance, rather than as the result of adverse selection in the purchase of insurance.

Job Change Patterns and the Wages of Young Men

This study uses data from the National Longitudinal Survey of Youth to distinguish empirically between moverstayer, search good, and experience good models of job mobility. We estimate wage models in which the pattern of overall job mobility affects both the level and tenure slope of the log-wage path. After controlling for the correlation between mobility patterns and time-constant person- and job-specific unobservables, we find that workers who undergo persistent mobility have lower log-wage paths than less mobile workers. This finding is consistent with models in which job mobility is driven by time-varying unobservables, such as experience good models, where changes in perceived match quality cause turnover.

Social security, economic growth, and the rise in elderly widows’ independence in the twentieth century

The percentage of elderly widows living alone rose from 18% in 1940 to 62% in 1990, while the percentage living with adult children declined from 59% to 20%. This study finds that income growth, particularly increased Social Security benefits, was the single most important determinant of living arrangements, accounting for nearly one-half of the increase in independent living. Unlike researchers in earlier studies, we find no evidence that the effect of income became stronger over the period. Changes in age, race, immigrant status, schooling, and completed fertility explain a relatively small share of the changes in living arrangements.

Why Parents Play Favorites: Explanations for Unequal Bequests

Economists have invested a great deal of effort in trying to understand the motivation for family transfers, yet recent empirical work testing the seemingly appealing models of altruism and exchange has led to decidedly mixed results. A major stumbling block has been the lack of adequate data. We take a fresh look at the issue using responses to an innovative survey question that directly asks mother about the planned division of their estates. We find that both altruism and exchange are frequently offered as explanations of behavior and are of nearly equal importance. Furthermore, the explanations are consistent with observable characteristics of the mother, lending support to the validity of the question. We also find that among step or adopted families, genetic ties play an important role. Because motivating factors appear to differ across families the lack of a consensus among previous researchers about motives ought not to be surprising.

Factors Determining Participation of the Elderly in Supplemental Security Income

The same low participation rates which plague many welfare programs have been observed among the elderly eligible for Supplemental Security Income (SSI). A number of hypotheses have been offered to explain the low enrollment, but none has attracted universal acceptance. In this paper I use the Survey of Income and Program Participation (SIPP) to examine the participation of the elderly in SSI. Because of the high quality of the data, I am able to determine eligibility more accurately than in most previous studies. In this sample, only 56 percent of those whom I determine to be eligible for SSI are presently receiving benefits. I model the decision to participate as a probit equation, but modify the likelihood function to account for measurement error in the expected benefit. The results indicate that participation is primarily determined by the financial situation of the eligible individuals. Although all those eligible for SSI are poor, those with little in the way of other resources are significantly more likely to participate. This finding differs from widespread beliefs that eligible individuals are discouraged by the difficulty of the application process, or that many are uninformed about the program.