Dementia and Long-Run Changes in Financial Health Among US Households
Author Information
Author(s): Li Jing, Kelley Amy, McGarry Kathleen, Nicholas Lauren, Skinner Jonathan
Hypothesis
What factors contribute to the divergence in household wealth between individuals who develop dementia and those who do not?
Conclusion
The study suggests that earlier exit from the labor force and suboptimal investment decisions contribute to the financial decline seen in households of individuals who develop dementia.
Supporting Evidence
- Household wealth diverges significantly 6-8 years before dementia onset.
- Changes in wealth are not due to higher healthcare costs or intentional spending to qualify for Medicare.
- Earlier exit from the labor force negatively impacts long-term income for those with dementia.
Takeaway
People who get dementia tend to have less money over time because they stop working earlier and make poor investment choices.
Methodology
The study analyzes two decades of data from the U.S. Health and Retirement Study to compare financial trajectories of households with and without dementia.
Participant Demographics
The patterns are more prominent among individuals with higher socioeconomic status.
Digital Object Identifier (DOI)
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