Household Finance and Life-Cycle Economic Decisions under the Shadow of Cancer

Kárpáti, D.;

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: I study the causal effects of life expectancy on financial, economic, and demographic decisions. My sample consists of individuals who undergo genetic testing for a hereditary cancer syndrome. Genetic testing randomizes tested persons into two groups. Those who test positive learn that they face a high risk of cancer and a shorter life expectancy. Those who test negative learn that their cancer risk is similar to that of the general population. The differences in outcomes between these two groups identify the effects of life expectancy. I find that life expectancy has a positive effect on wealth accumulation. Lower savings rates, safer portfolios, decreased labor supply, and different preferences for household composition explain lower wealth accumulation under reduced life expectancy.

Keywords: household finance; life expectancy; savings; labor supply; genetics (search for similar items in EconPapers)
JEL-codes: D14 E21 G51 I10 J22 (search for similar items in EconPapers)
Date: 2022-07
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Persistent link: https://EconPapers.repec.org/RePEc:yor:hectdg:22/16

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