John Pierce Wise, Kent D. Sugden, Travis J. O'Brien
2006 Mutation Research. Genetic Toxicology and Environmental Mutagenesis  
One of the most persistent fi ndings from research in the economics of aging is the depth of the relationship between health and fi nancial circumstances-two core dimensions of individual well-being as people age. In continuing research, a major focus is on understanding these dimensions of well-being, the strong correlations and causal connections between them, and how they are changing over time. For both demographic and economic reasons, it is a particularly important time to be studying the
more » ... economics of aging. We are in the midst of a substantial evolution in how people live in later life. The aging of the baby boom generation into older ages is one factor. Another major change of the last two decades has been the growth in retirement saving programs, particularly 401(k) plans, and a parallel decline in traditional defi ned-benefi t pension programs. Reforms to Social Security, Medicare, and Medicaid are also being implemented, as necessitated by changing population demographics and mounting fi scal pressures. Health and health care are evolving as well, with continuing advances in medicine, better disease management, improvement in health and functional ability, and increased longevity. An aging workforce, strained macroeconomic conditions, and fi scal imbalances in government are additional dimensions of the changing times. 2 David A. Wise and Richard Woodbury tween evolving health and evolving fi nancial well-being are a core substantive focus of current research in the economics of aging fi eld. Are people adequately prepared for the fi nancial needs of later life? How do people's fi nances and fi nancial well-being evolve over the course of later life? Do people have the right mix of annuitized payment streams and nonannuitized savings at older ages? What are the dimensions of health and functional ability that are most important to well-being at older ages? How do these dimensions of health evolve over the course of later life? How is health and work capacity changing over time? What factors contribute to health and economic wellbeing as people age? And how do these multiple health and fi nancial aspects of well-being interrelate? These are core questions of ongoing research, each of which is addressed in some way in the studies in this volume. This is the fourteenth in a series of NBER volumes synthesizing complementary analyses of economics of aging research. The goal is to bring together studies that are at the forefront of research in the fi eld. The volumes are not intended to cover the entire area of economics of aging research, but rather to highlight cutting edge research projects that together contribute to a more comprehensive understanding of health and economic well-being as people age. The chapters encompass advances in research methodology, data resources, current trends, and changing policies in health, work, fi nancial well-being, and retirement. Many of the studies are components of longerterm research themes of the NBER program on aging, and an attempt is made to place these new studies in the context of our larger agenda. Through fourteen volumes, the large majority of this research has been funded by the National Institute on Aging, which has made a long-term commitment to advancing the economics of aging fi eld. This volume continues the series with a collection of investigations in the economics of aging. The volume is divided into two sections: the fi rst weighted more heavily toward people's changing fi nancial circumstances as they age, and the second weighted more heavily toward people's changing health and health care. Even in the fi rst section, however, the emerging importance of out-ofpocket health care costs, or the risk of such costs, is emphasized as a growing need for fi nancial resources at older ages. Indeed, the interactions between health and fi nancial resources, and between health care costs and resource adequacy, are the general topic of the fi rst several chapters in the volume. The studies raise new questions about what constitutes resource adequacy Introduction 3 later in life, when out-of-pocket health care expenses are an increasing component of household budgets, on an ongoing basis, as well as an increased risk of much larger expenditure shocks (or reduced income) from adverse health events and health decline. Chapter 1 analyzes people's fi nances in the years leading up to their death, focusing on the variations in fi nancial circumstances and well-being across the population. Chapter 2 looks at the extent to which large out-of-pocket costs increase the risk of fi nancial hardship at older ages. Chapter 3 documents how health care cost growth has limited the infl ation-protection in the Social Security program, so that the buying power of Social Security income for other needs is in fact reduced over the post-retirement years. Chapter 4 extends a long-term research agenda on the factors infl uencing saving and asset accumulation during people's working years, focusing more narrowly on how loan provisions affect 401(k) balances. Together, these studies add substantial new pieces to our understanding of fi nancial circumstances in later life, as well as new perspective on how health and out-of-pocket costs for health care infl uence fi nancial well-being and resource adequacy. As noted, health and health care costs turn out to be major infl uences on both the level of fi nancial resources in later life, on the one hand, and the need for fi nancial resource expenditures, on the other. The results raise new questions about the appropriate income-replacement rate necessary to maintain standards of living, the distinct roles of annuitized versus nonannuitized fi nancial holdings, the appropriate formulas for infl ation-adjustment for older households, and the role of insurance for health declines-all of which are integrally related to resource adequacy. The next three studies in the volume focus more intensively on health status, health trends, and health measurement. Chapter 5 more clearly defi nes the major dimensions of health and functional ability, and how health is changing over time along these various dimensions. Chapter 6 focuses more narrowly on progress in cancer treatment and cancer outcomes as a more targeted case study of evolving health, as well as the complications in disentangling improved prevention, diagnosis, and treatment, and their respective effect on health outcomes. Chapter 7 is a methodological study on health measurement, improving our ability to interpret self-reported disability measures through the use of reference groups. All three studies add to our understanding of health and health trends, complementing the focus on fi nancial well-being in the fi rst four chapters. The last three chapters in the volume consider in greater depth the relationship between health and economic circumstances. Chapter 8 analyzes the causal pathways from socioeconomic circumstances to health, establishing a deeper understanding of the relationship, and how results may change with the data, sample size, and time span being studied.
doi:10.1016/j.mrgentox.2006.06.004 fatcat:az2f5nuot5hspg4cyltrhkcova