Title

Social security, living arrangements, health, and the economics of the family

Date of Award

2004

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Stacy Dickert-Conlin

Keywords

Social security, Living arrangements, Health, Family economics, Aging, Mortality

Subject Categories

Economics | Family, Life Course, and Society | Social and Behavioral Sciences | Sociology

Abstract

This dissertation consists of three essays on Social Security, elderly living arrangements, elderly mortality, and the economics of the family. The first essay focuses on the fastest growing and highest poverty group of elderly, the divorced aged women. I use an exogenous shift in benefit generosity for divorced Social Security recipients, following the death of the ex-spouse, to estimate the impact on their living arrangement choice. Unique features of the New Beneficiary Data System allow the identification of divorced benefit recipients and the death of their ex-spouse, based on Social Security administrative data. Previous literature argues that privacy is a normal good for the elderly. With a new approach and a fairly unexplored data set, I find this not to be true for the poorest group of elderly, the divorced retired women. The results suggest that independent living is a constraint for them, and higher income decreases the likelihood of living alone.

The research literature generally agrees on the positive relationship between income and health. However, it is quite difficult to ascertain the causality since income and health are jointly determined. The second essay will bring evidence on the causal effect of income on the mortality of retired elderly. I use the same exogenous shift in benefit generosity for divorced retired women to estimate the impact of income on their mortality. Relying on a previously unused natural experiment and using the New Beneficiary Data System, I bring additional evidence that an increase in income lowers the mortality of the elderly.

The third chapter investigates the effects of economic incentives on divorce and remarriage behavior. Before December 1977, the Social Security law entitled divorcees to claim auxiliary benefits on their ex-spouse's record only if the marriage lasted at least 20 years. One of the 1977 amendments of the Social Security rules shortened the minimum duration of an "eligible" marriage to ten years. Following the passage of the law, we find that the divorce rate at nine years of marriage decreased relative to a control group. However, there is not strong evidence of a corresponding increase in the divorce rate at ten years of marriage. We also find no evidence that the new claim on future Social Security benefits affected divorced women's remarriage probability in the predicted way.

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