Norma B. Coe

The effect of informal care on work and wages.

Cross-sectional evidence in the United States finds that informal caregivers have less attachment to the labor force. The causal mechanism is unclear: do children who work less become informal caregivers, or are children who become caregivers working less? Using longitudinal data from the Health and Retirement Study, we identify the relationship between informal care and work in the United States, both on the intensive and extensive margins, and examine wage effects. We control for time-invariant individual heterogeneity; rule out or control for endogeneity; examine effects for men and women separately; and analyze heterogeneous effects by task and intensity. We find modest decreases-2.4 percentage points-in the likelihood of working for male caregivers providing personal care. Female chore caregivers, meanwhile, are more likely to be retired. For female care providers who remain working, we find evidence that they decrease work by 3-10hours per week and face a 3 percent lower wage than non-caregivers. We find little effect of caregiving on working mens hours or wages. These estimates suggest that the opportunity costs to informal care providers are important to consider when making policy recommendations about the design and funding of public long-term care programs.

Estimating the Effect of Palliative Care Interventions and Advance Care Planning on Icu Utilization: A Systematic Review*

Objective: We conducted a systematic review to answer three questions: 1) Do advance care planning and palliative care interventions lead to a reduction in ICU admissions for adult patients with life-limiting illnesses? 2) Do these interventions reduce ICU length of stay? and 3) Is it possible to provide estimates of the magnitude of these effects? Data Sources: We searched MEDLINE, EMBASE, Cochrane Controlled Clinical Trials, and Cumulative Index to Nursing and Allied Health Literature databases from 1995 through March 2014. Study Selection: We included studies that reported controlled trials (randomized and nonrandomized) assessing the impact of advance care planning and both primary and specialty palliative care interventions on ICU admissions and ICU length of stay for critically ill adult patients. Data Extraction: Nine randomized controlled trials and 13 nonrandomized controlled trials were selected from 216 references. Data Synthesis: Nineteen of these studies were used to provide estimates of the magnitude of effect of palliative care interventions and advance care planning on ICU admission and length of stay. Three studies reporting on ICU admissions suggest that advance care planning interventions reduce the relative risk of ICU admission for patients at high risk of death by 37% (SD, 23%). For trials evaluating palliative care interventions in the ICU setting, we found a 26% (SD, 23%) relative risk reduction in length of stay with these interventions. Conclusions: Despite wide variation in study type and quality, patients who received advance care planning or palliative care interventions consistently showed a pattern toward decreased ICU admissions and reduced ICU length of stay. Although SDs are wide and study quality varied, the magnitude of the effect is possible to estimate and provides a basis for modeling impact on healthcare costs.

The Effect of Retirement on Cognitive Functioning

Cognitive impairment has emerged as a major driver of disability in old age, with profound effects on individual well-being and decision making at older ages. In the light of policies aimed at postponing retirement ages, an important question is whether continued labour supply helps to maintain high levels of cognition at older ages. We use data of older men from the US Health and Retirement Study to estimate the effect of continued labour market participation at older ages on later-life cognition. As retirement itself is likely to depend on cognitive functioning and may thus be endogenous, we use offers of early retirement windows as instruments for retirement in econometric models for later-life cognitive functioning. These offers of early retirement are legally required to be nondiscriminatory and thus, inter alia, unrelated to cognitive functioning. At the same time, these offers of early retirement options are significant predictors of retirement. Although the simple ordinary least squares estimates show a negative relationship between retirement duration and various measures of cognitive functioning, instrumental variable estimates suggest that these associations may not be causal effects. Specifically, we find no clear relationship between retirement duration and later-life cognition for white-collar workers and, if anything, a positive relationship for blue-collar workers.

How do people with disabilities cope while waiting for disability insurance benefits

Disability Insurance waiting time varies from a few months to several years. We estimate the causal effect of longer waiting times on the use of five financial coping strategies. We find that SNAP benefits are the most responsive to longer waiting times. Moreover, while spousal employment is not responsive to longer wait times, spousal employment leads to longer waiting times, presumably because these applicants are more able to appeal. Together, these results suggest that coping strategies are used to both help applicants during the wait time and to extend the waiting time and increase their probability of success.JEL Classification CodeH53; J08; I3

Potential Influence of Advance Care Planning and Palliative Care Consultation on Icu Costs for Patients With Chronic and Serious Illness

Objectives:To estimate the potential ICU-related cost savings if in-hospital advance care planning and ICU-based palliative care consultation became standard of care for patients with chronic and serious illness. Design and Setting:Decision analysis using literature estimates and inpatient administrative data from Premier. Patients:Patients with chronic, life-limiting illness admitted to a hospital within the Premier network. Interventions:None. Measurements and Main Results:Using Premier data (2008–2012), ICU resource utilization and costs were tracked over a 1-year time horizon for 2,097,563 patients with chronic life-limiting illness. Using a Markov microsimulation model, we explored the potential cost savings from the hospital system perspective under a variety of scenarios by varying the interventions’ efficacies and availabilities. Of 2,097,563 patients, 657,825 (31%) used the ICU during the 1-year time horizon; mean ICU spending per patient was 11.3k (SD, 17.6k). In the base-case analysis, if in-hospital advance care planning and ICU-based palliative care consultation were systematically provided, we estimated a mean reduction in ICU costs of 2.8k (SD, 14.5k) per patient and an ICU cost saving of 25%. Among the simulated patients who used the ICU, the receipt of both interventions could have resulted in ICU cost savings of 1.9 billion, representing a 6% reduction in total hospital costs for these patients. Conclusions:In-hospital advance care planning and palliative care consultation have the potential to result in significant cost savings. Studies are needed to confirm these findings, but our results provide guidance for hospitals and policymakers.

What Explains State Variation in SSDI Application Rates

Social Security Disability Insurance (SSDI) applications and receipts vary greatly by state. This paper investigates the extent to which this geographic variation in SSDI applications reflects differences in health, demographics, and employment characteristics, state policies, and politics. We find that demographic, health, and employment characteristics of the state have the greatest effect on state-level variations in SSDI application rates, explaining over 70 percent of the variation. State policy concerning mandated employer-sponsored disability insurance (also known as temporary disability insurance or TDI) has a small negative effect on overall SSDI applications. This finding supports the principle underlying many recent SSDI reform plans: temporary disability insurance coverage could save the SSDI program considerable funds in the long run. Further, when we look to explain variation within a state, we find that state changes in health insurance regulation are negatively correlated with the SSDI application rate. This could be an indication that the Affordable Care Act (ACA) may have spillovers to the SSDI program.

Children and Household Utility: Evidence from Kids Flying the Coop

Using consumption and wealth data from the Health and Retirement Study (HRS), this paper explores the impact of children leaving home on household consumption. We find that households maintain their household-level consumption, despite the fact that the number of individuals in the household has decreased, increasing per-capita consumption. Further, we find no evidence of increases in total net wealth, or any of its components, after children leave the household. These findings suggest that households do not dramatically change their savings or consumption patterns when their children fly the coop. Those households who are already behind in their retirement preparations will remain at risk of entering retirement with insufficient wealth to maintain their pre-retirement standard of living.

Great Recession-Induced Early Claimers: Who are They? How Much Do They Lose?

During the Great Recession, more older workers have claimed Social Security benefits early. This paper addresses two important policy questions: Who are these early claimers? How much retirement income have they lost as a result of claiming early? Using the Health and Retirement Study (HRS) we estimate a discrete-time hazard model that makes claiming Social Security benefits a function of age, personal characteristics, and the national unemployment rate. We project that high unemployment rates during the Great Recession led to a 5-percentage-point increase in the probability of claiming early relative to a less severe recession such as the 2001-2003 downturn, and this increase was nearly uniform across socioeconomic groups. Our estimates also suggest that while the Great Recession did impact the claiming decision, it did not cause a dramatic change in benefits. “Great Recession Claimers” – those whom we simulate were likely to claim early during the Great Recession but would not have in a milder downturn – filed for Social Security only 6 months earlier, on average, than they would have in a minor recession. This modest change in timing reduced their monthly Social Security benefit checks by

Effects of Public Policies on the Disposition of Pre-Retirement Lump-Sum Distributions: Rational and Behavioral Influences

56, or 4.6 percent of average monthly benefits, and the Social Security replacement rate fell by 1.7 percentage points relative to a more typical recession. The benefit reduction resulted from the combined effect of the actuarial reduction for early claiming and the foregone opportunity to continue working and increase the wage base used for calculating benefits.

The Impact of a DROP Program on the Age of Retirement and Employer Pension Costs

A variety of public policies aim to influence workers’ disposition of preretirement lump-sum distributions (LSDs) from pensions. We use the implementation of several policy changes as natural experiments to test for rational and behavioral motives for saving behavior. Using data from the HRS and the CPS in the 1980s and 1990s, we find that higher tax rates on cash-outs increase rollovers. Controlling for the overall effective tax rate, structuring the tax as a “penalty” or adding withholding taxes on cashouts significantly increases rollovers. Allowing employers to unilaterally cash out balances for departing employees who do not make their own choice significantly reduces the effects of higher tax rates but boosts the impact of withholding taxes. These results suggest that both behavioral and rational factors influence workers’ choices, that policies relating to pre-retirement cash outs can interact in important ways, and that the government has several levers at its disposal to influence behavior beyond tax penalties.