Published in:University of Aarhus Department of Economics Working Paper ; No. 2006-5
Extent:
1 Online-Ressource (41 p)
Language:
English
DOI:
10.2139/ssrn.1147034
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 24, 2006 erstellt
Description:
Preparing for the end of life, especially for the prospect of needing long-term are, is an important issue facing older Americans. Those who reach age 65 have a 40% chance of going into a nursing home in their remaining lifetime, and about 10% of those who do will stay there for at least five years. The costs of a stay are high with on average US$70,000 annually for a private room. Long-term stays in nursing homes are, therefore, not likely, but very expensive. In this paper, we examine individual expectations about future nursing home entry and study the relationship between these expectations and savings behavior, using data from the Health and Retirement Study. We find a clear relation between subjective expectations and probability of future nursing home entry, and a positive effect of these expectations on savings behavior. Surprisingly, we find no difference of this effect by wealth group, so it seems that Medicaid eligibility in the context of nursing home entry plays no factor in the decision to save