Trends in inequalities in the prevalence of dementia in the United States.

This paper presents estimates of the prevalence of dementia in the United States from 2000 to 2016 by age, sex, race and ethnicity, education, and a measure of lifetime earnings, using data on 21,442 individuals aged 65 y and older and 97,629 person-year observations from a nationally representative survey, the Health and Retirement Study (HRS). The survey includes a range of cognitive tests, and a subsample underwent clinical assessment for dementia. We developed a longitudinal, latent-variable model of cognitive status, which we estimated using the Markov Chain Monte Carlo method. This model provides more accurate estimates of dementia prevalence in population subgroups than do previously used methods on the HRS. The age-adjusted prevalence of dementia decreased from 12.2% in 2000 (95% CI, 11.7 to 12.7%) to 8.5% in 2016 (7.9 to 9.1%) in the 65+ population, a statistically significant decline of 3.7 percentage points or 30.1%. Females are more likely to live with dementia, but the sex difference has narrowed. In the male subsample, we found a reduction in inequalities across education, earnings, and racial and ethnic groups; among females, those inequalities also declined, but less strongly. We observed a substantial increase in the level of education between 2000 and 2016 in the sample. This compositional change can explain, in a statistical sense, about 40% of the reduction in dementia prevalence among men and 20% among women, whereas compositional changes in the older population by age, race and ethnicity, and cardiovascular risk factors mattered less.

Trends in Health in Midlife and Late Life.

Gains in life expectancy have recently slowed and mortality inequalities have increased. This paper examines whether trends in health observed at ages 55 to 89 mirror those trends in mortality, which may serve as an early indicator for the future evolution of mortality. We found that many health outcomes have worsened from 1992 to 2016, especially at ages below 70, and that differentials in health between low and high education groups have increased among the more recent cohorts. Overall the findings cast a pessimistic light on the future evolution of mortality rates and mortality inequalities.

Computerization, Obsolescence and the Length of Working Life.

This paper analyzes how computerization affected the labor market outcomes of older workers between 1984 and 2017. Using the computerization supplements of the Current Population Survey (CPS) we show that different occupations were computerized at different times, older workers tended to start using computers with a delay compared to younger workers, but computer use within occupations converged to the same levels across age groups eventually. That is, there was a temporary knowledge gap between younger and older workers in most occupations. We estimate how this knowledge gap affected older workers' labor market outcomes using data from the CPS and the Health and Retirement Study. Our models control for occupation and time fixed effects and in some models; we also control for full occupation-time interactions and use middle aged (age 40-49) workers as the control group. We find strong and robust negative effects of the knowledge gap on wages, and a large, temporary increase in transitions from work to non-participation, consistent with a model of creative destruction in which the computerization of jobs made older workers' skills obsolete in birth cohorts that experienced computerization relatively late in their careers. We find larger effects on females and on middle-skilled workers.

Forecasting mortality inequalities in the U.S. based on trends in midlife health.

Recent literature has documented a widening gap in mortality between older individuals of high versus low socioeconomic status (SES) in the U.S. This paper investigates whether this trend will continue. We analyze the health status of successive cohorts of 54-60-year-old U.S. individuals born between 1934 and 1959 and use a rich set of health indicators to forecast life expectancies. The detailed health measures come from the longitudinal Health and Retirement Study. We find that many health indicators have worsened recently. For example, rates of obesity, diabetes, and self-reported levels of pain sharply increased between 1992 and 2016. Directly relevant for mortality, recent cohorts report lower subjective survival probabilities. Using Social Security wealth as an SES indicator, we find strong evidence for increasing health inequalities. We predict overall life expectancy to increase further; but the increase will be concentrated among higher SES individuals and mortality inequality will continue to increase.

The Age Profile of Life Satisfaction After Age 65 in the U.S.

Although income and wealth are frequently used as indicators of well-being, they are increasingly augmented with subjective measures such as life satisfaction to capture broader dimensions of the well-being of individuals. Based on large surveys of individuals, life satisfaction in cross-section often is found to increase with age beyond retirement into advanced old age. It may seem puzzling that average life satisfaction does not decline at older ages because older individuals are more likely to experience chronic or acute health conditions, or the loss of a spouse. Accordingly, this empirical pattern has been called the "paradox of well-being." We examine the age profile of life satisfaction of the U.S. population age 65 or older in the Health and Retirement Study (HRS), and find that in cross-section it increases between age 65 and 71 and is flat thereafter; but based on the longitudinal dimension of the HRS, life satisfaction significantly declines with age and the rate of decline accelerates with age. We reconcile the cross-section and longitudinal measurements by showing that both differential mortality and differential non-response bias the cross-sectional age profile upward: individuals with higher life satisfaction and in better health tend to live longer, and, among survivors, individuals with higher life satisfaction are more likely to remain in the survey, masking the decline in life satisfaction experienced by individuals as they age. We conclude that the optimistic view about increasing life satisfaction at older ages based on cross-sectional data is not warranted.

The Effects of Job Characteristics on Retirement.

Along with data about actual, desired and anticipated job characteristics, this paper uses a novel data element, the subjective conditional probability of working at age 70, to estimate the causal effects of job characteristics on retirement in the U.S. Having flexible work hours is the most consistent predictor of retirement preferences and expectations: if all current workers had flexible hours, the fraction working at age 70 would be 0.322, but it would be just 0.172 if none had this option. Job stress, physical and cognitive job demands, the option to telecommute, and commuting times were additional predictors of retirement expectations.

The Relationship Between Lifetime Out-of-pocket Medical Expenditures, Dementia, and Socioeconomic Status in the U.S.

Dementia is one of the most expensive medical conditions. The costs are borne by families, by private insurance and by society via public programs such as Medicaid in the U.S.. There is extensive research on the relationship between dementia and annual medical spending. This paper, instead, estimates cumulative lifetime medical expenditures that can be attributed to the onset of dementia using a nationally representative longitudinal survey from the U.S., the Health and Retirement Study. The lifetime expenditures are estimated by summing any out-of-pocket medical spending reported in the panel from age 65 to death. Censored cases are imputed using a non-parametric matching algorithm called splicing. For example, survivors to the most recent wave are matched to similar individuals from older cohorts who are observed at the relevant ages all the way through death. We find that those who live with dementia for at least half a year pay, on average, $38,540 more out of pocket from age 65 to death when controlling for length of life, demographics, lifetime earnings and comorbidities. The costs of dementia are almost exclusively due to spending on nursing homes. Spending on drugs, doctor visits or hospitals, is not significantly related to dementia. The lifetime costs of dementia are significantly larger for white and rich individuals, perhaps because they use higher quality nursing homes and because they have more financial resources to spend down before becoming eligible for Medicaid support.

Dementia Prevalence in the United States in 2000 and 2012: Estimates Based on a Nationally Representative Study.

Objectives: Age- and sex-specific rates of dementia are estimated in the U.S. population aged 65 or older in 2000 and 2012 using a large nationally representative dataset, the Health and Retirement Study (HRS), and accounting for mortality selection and specificities of the interview protocol. Method: A latent cognitive ability model is estimated by maximum simulated likelihood. Prevalence of dementia is identified using HRS cognition measures and the Aging, Demographics and Memory Study (ADAMS), a subset of the HRS (n = 856) with clinical assessment for dementia. Different cognitive measures are collected in self and proxy interviews. From 2006 onward, the HRS collected fewer interviews by proxy. Selection into proxy interviews is modeled as well as survival into the ADAMS sample from the previous HRS interview. Results: The prevalence of dementia decreased from 12.0% (SE = 0.48%) in 2000 to 10.5% (SE = 0.49%) in 2012 in the 65+ population, a statistically significant decline of 12.6% (p < .01). The percentage change in prevalence was larger among males (16.6% vs 9.5%), and younger individuals. Discussion: The prevalence of dementia among those 65 or older decreased between 2000 and 2012, although less rapidly than reported in other studies. The difference is primarily due to our modeling selection into proxy interviews.

A Comparison of Subjective and Objective Job Demands and Fit with Personal Resources as Predictors of Retirement Timing in a National U.S. Sample.

Population aging and attendant pressures on public budgets have spurred considerable interest in understanding factors that influence retirement timing. A range of sociodemographic and economic characteristics predict both earlier and later retirement. Less is known about the role of job characteristics on the work choices of older workers. Researchers are increasingly using the subjective ratings of job characteristics available in the Health and Retirement Study in conjunction with more objective measures of job characteristics from the Occupational Information Network (O*NET) database. Employing a theoretically-informed model of job demands-personal resources fit, we constructed mismatch measures between resources and job demands (both subjectively and objectively assessed) in physical, emotional, and cognitive domains. When we matched comparable measures across the two data sources in the domains of physical, emotional, and cognitive job demands, we found that both sources of information held predictive power in relation to retirement timing. Physical and emotional but not cognitive mismatch were associated with earlier retirement. We discuss theoretical and practical implications of these findings and directions for future research.

Estimating Second Order Probability Beliefs from Subjective Survival Data.

Based on subjective survival probability questions in the Health and Retirement Study (HRS), we use an econometric model to estimate the determinants of individual-level uncertainty about personal longevity. This model is built around the modal response hypothesis (MRH), a mathematical expression of the idea that survey responses of 0%, 50%, or 100% to probability questions indicate a high level of uncertainty about the relevant probability. We show that subjective survival expectations in 2002 line up very well with realized mortality of the HRS respondents between 2002 and 2010. We show that the MRH model performs better than typically used models in the literature of subjective probabilities. Our model gives more accurate estimates of low probability events and it is able to predict the unusually high fraction of focal 0%, 50%, and 100% answers observed in many data sets on subjective probabilities. We show that subjects place too much weight on parents' age at death when forming expectations about their own longevity, whereas other covariates such as demographics, cognition, personality, subjective health, and health behavior are under weighted. We also find that less educated people, smokers, and women have less certain beliefs, and recent health shocks increase uncertainty about survival, too.

STOCK MARKET CRASH AND EXPECTATIONS OF AMERICAN HOUSEHOLDS.

This paper utilizes data on subjective probabilities to study the impact of the stock market crash of 2008 on households' expectations about the returns on the stock market index. We use data from the Health and Retirement Study that was fielded in February 2008 through February 2009. The effect of the crash is identified from the date of the interview, which is shown to be exogenous to previous stock market expectations. We estimate the effect of the crash on the population average of expected returns, the population average of the uncertainty about returns (subjective standard deviation), and the cross-sectional heterogeneity in expected returns (disagreement). We show estimates from simple reduced-form regressions on probability answers as well as from a more structural model that focuses on the parameters of interest and separates survey noise from relevant heterogeneity. We find a temporary increase in the population average of expectations and uncertainty right after the crash. The effect on cross-sectional heterogeneity is more significant and longer lasting, which implies substantial long-term increase in disagreement. The increase in disagreement is larger among the stockholders, the more informed, and those with higher cognitive capacity, and disagreement co-moves with trading volume and volatility in the market.