Dementia and Long-run Trajectories in Household Finances

Jing Li, Kathleen M. McGarry, Lauren Hersch Nicholas and Jonathan S. Skinner

No 34659, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Existing evidence suggests that wealth may decline before dementia onset, but the mechanisms underlying these reductions are poorly understood. Using longitudinal data from the Health and Retirement Study, we compare household finance trajectories for individuals who later develop dementia and those who do not. We find that wealth divergence between the two groups is not explained by reduced earnings, higher healthcare spending, intentional “spend-down” to qualify for Medicaid coverage, state-dependent utility, or reverse causation by which wealth declines cause dementia. Instead, our results point to impaired financial decision-making beginning about six years prior to clinically recognizable dementia.

JEL-codes: G51 I10 I3 (search for similar items in EconPapers)
Date: 2026-01
Note: AG EH
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34659.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. Free access is also available to older working papers.

Related works:
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: https://EconPapers.repec.org/RePEc:nbr:nberwo:34659

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34659
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 National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().