Health and the share of wealth held in risky assets

Alejandro Vega (alejandro.vega@umu.se) and Evangelia Velli (evangelia.velli@umu.se)
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Alejandro Vega: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden, https://www.umu.se/handelshogskolan
Evangelia Velli: Business Administration, Umeå School of Business, Economics and Statistics, https://www.umu.se/handelshogskolan

No 972, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: This paper focuses on the correlation between negative health shocks and the households’ shareof wealth held in risky assets. By using U.S. data from the Health and Retirement Study, we try toestablish a link between negative health shocks and financial outcomes such as a household’s probabilityof owning risky assets and share of risky assets held. In our definition of a recent negative health shock,we include: cancer or malignant tumor diagnoses, stroke or transient ischemic attack, and heart attack,coronary heart disease, angina, congestive heart failure, or other heart problems. We find an importantnegative correlation between a negative health shock to the female and her household’s probabilityof owning risky assets and share of risky assets held, respectively. In contrast, we do not find acorresponding statistically significant correlation for males.

Keywords: aging couples; health shock; household portfolio choice; share of risky assets; risky financial assets; Health and Retirement Study (search for similar items in EconPapers)
JEL-codes: G11 G50 I10 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2020-03-06
New Economics Papers: this item is included in nep-age
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