Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men

Christoph Wunder () and Johannes Schwarze ()
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Christoph Wunder: University of Erlangen-Nuremberg
Johannes Schwarze: University of Bamberg

No 4485, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that women's utility is higher if they are married. Thus, extending the lifespan of men would benefit women. Using life satisfaction data from the German Socio-Economic Panel Study (SOEP), we conduct an empirical test of this assumption. We apply a two-step estimation strategy: first, we use a propensity score matching approach to generate a control group of non-widowed women. The average level of life satisfaction in the control group serves as a reference to measure the degree of adaptation to widowhood. In the second step, the life satisfaction trajectories of both groups are estimated using penalized spline regressions. The results suggest bereavement has no enduring effect on life satisfaction, and that falsifies Posner's assumption.

Keywords: widowhood; adaptation; subjective well-being; life satisfaction; penalized spline regression; propensity score matching (search for similar items in EconPapers)
JEL-codes: C14 D10 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-hea
Date: 2009-10

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