Michael D. Hurd

Living Longer, Working Longer

When people live longer, the costs of Social Security and Medicare increase and threaten the sustainability of these programs. Households also worry about how to finance more retirement years. But people are working longer, and if they continue to do so, they will reduce some of the problems.

The Cost of Dementia: Who Will Pay?

It is time for the government in partnership with industry to return to the drawing board to craft a plan that will provide protection for the more than 9 million people who will need care for dementia by 2040, writes Michael D. Hurd.

Journal Article

Spending Trajectories After Age 65 Variation by Initial Wealth

Financial planning requires information about how spending needs evolve with age. Spending declines after age 65, also among wealthy households, suggesting that the decline is due to changes in the desire to spend, not tightening economic circumstances.

Tool

RAND HRS Longitudinal File 2020 (V1) Documentation: Includes 1992-2020 (Early Release)

This tool is a cleaned, easy-to-use, and streamlined data product containing information from the Health and Retirement Study, a longitudinal household survey that facilitates research into different aspects of population aging in the United States.

Report

Spending Trajectories After Age 65: Variation by Initial Wealth

This report presents estimates of household spending trajectories from age 65 through the retirement years and how the trajectories vary by initial wealth position. The results help to anticipate and plan for household spending needs at older ages.

Journal Article

Saving Regret and Procrastination

Saving regret, or the wish in hindsight to have saved more earlier in life, is widespread in older populations. Little of the variation is explained by procrastination and psychological factors. Unemployment, health, and divorce are larger factors.

Draft

The Age Profile of Life-Satisfaction After Age 65 in the U.S.

Examines the age profile of life satisfaction of the U.S. population age 65 and older in the Health and Retirement Study to corroborate the view of increasing life satisfaction at older ages based on cross-sectional data.

Journal Article

The Effects of Job Characteristics on Retirement

We present results from a survey fielded in the RAND American Life Panel. The survey queried older workers about their current,desired, and expected job characteristics, and about how certain characteristics would affect their retirement decisions.

Journal Article

The Effect of Housing Wealth Losses on Spending in the Great Recession

This article represents the first U.S. study employing exclusively household-level longitudinal data spanning the Great Recession to estimate the response of household spending to negative wealth shocks induced by the sharp declines in house prices.

Journal Article

The Relationship Between Lifetime Out-of-Pocket Medical Expenditures, Dementia, and Socioeconomic Status in the U.S.

This paper estimates cumulative lifetime medical expenditures that can be attributed to the onset of dementia using a nationally representative longitudinal survey from the U.S., the Health and Retirement Study.

Draft

Measuring Probability Numeracy

Explores different batteries of questions to measure levels of probability numeracy, the ability of individuals to think in probabilistic terms and use probabilities effectively in everyday life.

Journal Article

Dementia Prevalence in the United States in 2000 and 2012: Estimates Based on a Nationally Representative Study

The prevalence of dementia in the U.S. among those 65 or older decreased between 2000 and 2012, although less rapidly than reported in other studies.

Journal Article

Does Home Production Replace Consumption Spending? Evidence from Shocks in Housing Wealth in the Great Recession

This paper sheds new light on the importance of home production in welfare analyses by focusing on the elasticity of substitution estimated over the retired population, thus holding constant non-work time, but also on the share of spending that is potentially substitutable.

Journal Article

High-frequency Internet Survey of a Probability Sample of Older Singaporeans: The Singapore Life Panel®

We detail the methodology by which the Singapore Life Panel was constructed using a population-representative sampling frame from the Singapore Department of Statistics.

Journal Article

Distribution of Lifetime Nursing Home Use and of Out-of-Pocket Spending

By following individuals over many years as they progress to advanced old age, we estimated how many days individuals will spend in nursing homes and how much they will spend out-of-pocket.

Journal Article

Personality and Employment Transitions at Older Ages: Direct and Indirect Effects Through Non-Monetary Job Characteristics

We assess the extent to which personality traits are directly associated with labor force transitions at older ages and moderate the effect of non-monetary job characteristics on retirement decisions.

Journal Article

Individual Survival Curves Comparing Subjective and Observed Mortality Risks

Data on Health and Retirement study respondents' expected life span and actual mortality shows that some demographic groups tend to be overly pessimistic about how long they'll live, which could lead to under-saving for retirement.

Draft

Improved Wealth Measures in the Health and Retirement Study: Asset Reconciliation and Cross-Wave Imputation

Presents improved wealth measures for the Health and Retirement Study (HRS), which aim to reduce the effect of observation error on wealth levels and changes in wealth.

Journal Article

The Effect of Job Loss on Health: Evidence from Biomarkers

Our results suggest that layoffs and business closure have truly distinct effects on health.

Draft

The Impact of Employment Transitions on Subjective Well-Being: Evidence from the Great Recession and Its Aftermath

Using data from the Financial Crisis Surveys collected in the American Life Panel, this study estimates the causal effect of work transitions, in particular unemployment and reemployment, on subjective well-being between November 2009 and April 2013 in the US.

Journal Article

US Prevalence and Predictors of Informal Caregiving for Dementia

This study looks at the prevalence and predicators in informal care for cognitive impairment or probable dementia in the U.S.

Draft

The Effect of Housing and Stock Wealth Losses on Spending in the Great Recession

Uses panel data at the household level on a complete inventory of household spending and assets to estimate the spending response to the sharp and largely unexpected declines in house and stock market prices that occurred in the Great Recession.

Journal Article

Disease Incidence and Mortality Among Older Americans and Europeans

Overall, the origin of the higher prevalence of health conditions in the United States results from a higher incidence of diseases and prevalence earlier in the life course.

Journal Article

Future Monetary Costs of Dementia in the United States Under Alternative Dementia Prevalence Scenarios

In the present paper we modified the age-specific prevalence rates according to two scenarios.

Journal Article

Subjective Mortality Risk and Bequests

The results of this paper show a strong empirical relevance of subjective survival curves, indicating the importance to take into consideration of this dimension of individual heterogeneity in life cycle models.

Research Brief

More Americans May Be Adequately Prepared for Retirement Than Previously Thought

Because spending in retirement tends to decline with age, a new study finds that 71 percent of Americans are adequately prepared for retirement: 81 percent of married persons and 57 percent of single persons. Women are less prepared than men.

Infographic

Dementia's Mounting Toll on the U.S. Economy

Dementia costs Americans hundreds of billions of dollars per year, and the annual cost could top half a trillion by 2040 due to the 'graying' of the U.S. population.

Testimony

The Monetary Costs of Dementia in the United States

Testimony presented before the Senate Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on February 26, 2014.

Draft

How Do Management Fees Affect Retirement Wealth Under Mexico’s Personal Retirement Accounts System?

Examines changes in retirement wealth resulting from Mexico's transformation from its pay-as-you-go social-security system to a fully funded system with personal retirement accounts, including management fees.

Journal Article

How Do Management Fees Affect Retirement Wealth Under Mexico's Personal Retirement Accounts System?

In 1997, Mexico transformed its pay-as-you-go social security system to a fully funded system with personal retirement accounts, including management fees. This article examines changes in retirement wealth resulting from this new system.

Journal Article

Heterogeneity in Spending Change at Retirement

The simple one-good model of life-cycle consumption requires that consumption be continuous over retirement; yet prior research based on partial measures of consumption or on synthetic panels indicates that spending drops at retirement, a result that has been called the retirement-consumption puzzle.

Testimony

The Monetary Costs of Dementia in the United States: Addendum

Document submitted on July 12, 2013 as an addendum to testimony presented before the Senate Special Committee on Aging on April 24, 2013.

Testimony

The Monetary Costs of Dementia in the United States

Testimony presented before the Senate Special Committee on Aging on April 24, 2013.

Journal Article

Monetary Costs of Dementia in the United States

Dementia represents a substantial financial burden on society, one that is similar to the financial burden of heart disease and cancer.

Draft

Measuring Total Household Spending in a Monthly Internet Survey: Evidence from the American Life Panel

Reports on the outcomes of a monthly Internet survey designed to measure total household spending as the aggregate of about 40 spending components.

Draft

Stock Price Expectations and Stock Trading

Analyzes the relationships between actual stock market price changes and the subjective probability of price changes, and between the subjective probability of price changes and the likelihood of engaging in stock trading.

Journal Article

Economic Preparation for Retirement

The overall goal of this chapter is to assess economic preparation for retirement in a way that addresses many of the deficiencies of the income replacement rate concept.

Draft

Intervivos Giving Over the Lifecycle

Describes financial transfers made by parents to children and their correlation with donor characteristics such as age, and looks at how transfers reflect changes in marital status, economic status, and health.

Draft

Economic Preparation for Retirement

Defines and estimates measures of economic preparation for retirement based on an inventory of economic resources while taking into account the risk of living to advanced old age and the risk of high out-of-pocket spending for health care services.

Draft

Effects of the Financial Crisis and Great Recession on American Households

Presents evidence from high-frequency data collections dedicated to tracking the effects of the financial crisis and great recession on American households.

Journal Article

Inter-vivos Giving By Older People in the United States: Who Received Financial Gifts from the Childless?

Using data for 1996 to 2004 from the United States Health and Retirement Study, this article examines the differences between parents and childless older people in financial transfers to people other than their children.

Draft

Methodological Innovations in Collecting Spending Data: The HRS Consumption and Activities Mail Survey

Examines issues that arise designing a survey module to collect spending data with strict time constraints.

Draft

Using International Micro Data to Learn about Individuals' Responses to Changes in Social Insurance

Examines the scope of cross-country variation in institutions related to social insurance.

Draft

The Retirement-Consumption Puzzle: Actual Spending Change in Panel Data

Examines panel data on total spending, nondurable spending, and food spending to explain patterns of decline in consumption for U.S. and British households after their members retire.

Research Brief

Modeling the Health and Medical Care Spending of the Future Elderly

This research brief summarizes studies showing that medical innovations will improve health and extend life but will likely increase Medicare spending; eliminating obesity and better prevention could save Medicare money and improve health.

Journal Article

Prevalence of Cognitive Impairment Without Dementia in the United States

Presents data to support implementation of Functional Family Therapy, an evidence-based family prevention and intervention program for adolescents with conduct disorder or oppositional defiant disorder, in family and child mental health services.

Journal Article

A Test for Anchoring and Yea-Saying in Experimental Consumption Data

Analyzes experimental survey data, with a random split into respondents who get an open-ended question and those immediately directed to unfolding brackets. Once yea-saying is taken into account, no evidence of anchoring at the entry point is found.

Research Brief

Obesity and Disability: The Shape of Things to Come

This research brief summarizes studies that found that individuals who are obese face greater challenges in terms of disability and chronic disease than do their non-obese counterparts.

Draft

Time-Use in the Older Population: Variation by Socio-economic Status and Health

Presents data from the Health and Retirement Study, representative of the U.S. population age 51 and over, on time-use: paid work, housework, leisure, personal care, sleep, exercise, managing finances, time at computer, socializing, and volunteering.

Draft

Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS

Finds that the poverty rate based on consumption is lower than the income-based poverty rate, particularly for older single persons such as widows. The explanation for the difference is the ability to consume out of wealth.

Journal Article

Prevalence of Dementia in the United States: The Aging,demographics, and Memory Study

The authors estimate the prevalence of Alzheimer's disease (AD) and other dementias in the USA using a nationally representative sample.

Draft

Some Answers to The Retirement-Consumption Puzzle

Examines models of economic behavior to explain patterns of decline in consumption for U.S. and British households after their members retire.

Research Brief

Future Health and Medical Care Spending of the Elderly: Implications for Medicare

A team of economists and physicians explored how changes in medical technology, disease, and disability would affect health care spending for the population age 65 and older.

Draft

The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement

Journal Article

Consequences of Health Trends and Medical Innovation for the Future Elderly

Recent innovations in biomedicine seem poised to revolutionize medical practice.

Draft

Models for Anchoring and Acquiescence Bias in Consumption Data

In this paper, several models for anchoring and acquiescence are estimated using experimental data on household consumption from the AHEAD 1995 survey.

Draft

A Test for Anchoring and Yea-Saying in Experimental Consumption Data

In this paper, some existing models for anchoring are considered and their implications are analyzed for differences between the true distribution of the variable of interest and the distribution obtained if anchoring according to a given model is present.

Report

Health Status and Medical Treatment of the Future Elderly: Final Report

This report describes the Future Elderly Model, a demographic-economic model of health spending projections developed by RAND Health to help the Centers for Medicare and Medicaid Services' more accurately predict future health care costs.

Draft

Increases in Wealth among the Elderly in the Early 1990s: How Much is Due to Survey Design?

Journal Article

Disability Forecasts and Future Medicare Costs

The traditional focus of disability research has been on the elderly, with good reason.

Draft

The Effects of Subjective Survival on Retirements and Social Security Claiming

Mortality risk influences retirement and the desire to annuitize wealth. RAND finds that those with very low subjective probabilities of survival retire and claim earlier than those with higher probabilities, but that the effects are not large.

Report

Enhancing the Quality of Data on Income: Recent Innovations from the HRS

This paper evaluates two survey innovations introduced in the HRS that aimed to improve income measurement.

Draft

Expected Bequests and Their Distribution

Based on a population-representative sample of actual bequests, this report estimates that households in the 70-74 age band will bequeath just 39 percent of their wealth, consuming the rest before they die.

Journal Article

Forecasting the Nursing Home Population

In recent years, the rate of institutionalization among the elderly has been falling.

Draft

Health, Wealth, and the Role of Institutions

This report develops a theoretical model to relate changes in health status to income, and changes in income to health status. The authors show that income or wealth inequality is closely connected to health inequality.

Draft

Real Wealth Changes from 1982 to 1991 Among the Newly Retired

This paper studies rates of saving and consumption among the recently retired during the 1980s. It also documents outlays associated with the death of a spouse to find the causes of wealth loss at widowhood.

Draft

The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement

The authors find that data on anticipated consumption changes at retirement and on realized consumption changes following retirement show that reductions in consumption at retirement are fully anticipated.

Report

Anticipated and Actual Bequests

The authors studied the role of inheritances and bequests in shaping household decisions of wealth accumulation using new methods of measuring bequests.

Draft

Are Bequests Accidental or Desired?

After discussing the important for public policy of the magnitude of any bequest motive, the author attempts to specify how a bequest motive should affect actual bequest outcomes.

Draft

The Effects of Large Capital Gains on Work and Consumption: Evidence from Four Waves of the HRS

The authors examine how the large increase in wealth in the mid- to late 1990s affected retirement and consumption behavior. Specifically, the authors investigate how gains from stock holdings were spent.

Draft

Anchoring and Acquiescence Bias in Measuring Assets in Household Surveys

This report presents evidence of anchoring and acquiescence bias in the Health and Retirement Study. These biases are prevalent and significant enough that they should be taken into account when estimating population distribution of assets.

Draft

Mortality Risk and Consumption by Couples

This report analyzes how variations in mortality risk, economic wealth, and taste parameters explain asset consumption by couples.

Draft

An Analysis of the Choice to Cash Out Pension Rights at Job Change or Retirement

If private pension plan funds are consumed before or immediately after retirement, old-age income may decline, and public policy may require adjustment. Using new data, RAND finds that the issue is far less severe than suggested by prior research.