The Effect of Subjective Survival Probabilities on Retirement and Wealth in the United States

David Bloom, David Canning (), Michael John Moore () and Younghwan Song

No 12688, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the proposition that expected longevity affects retirement decisions and accumulated wealth using micro data drawn from the Health and Retirement Study for the United States. We use data on a person's subjective probability of survival to age 75 as a proxy for their prospective lifespan. In order to control for the presence of measurement error and focal points in responses, as well as reverse causality, we instrument subjective survival probabilities using information on current age, or age at death, of the respondent's parents. Our estimates indicate that increased subjective probabilities of survival result in increased household wealth among couples, with no effect on the length of the working life. These findings are consistent with the view that retirement decisions are driven by institutional constraints and incentives and that a longer expected lifespan leads to increased wealth accumulation.

JEL-codes: D1 I1 J1 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea
Date: 2006-11
Note: AG HC HE LS PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w12688.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: The Effect of Subjective Survival Probabilities on Retirement and Wealth in the United States (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:12688

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w12688
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().