Differential-Difference Equations. By Richard Bellman and Kenneth L. Cooke. Pp. xvi, 465. 1963. (Academic Press)

Introduction: In a recent report, the American Heart Association estimated that medical costs and productivity losses of cardiovascular disease (CVD) are expected to grow from $555 billion in 2015 to $1.1 trillion in 2035. Although the burden is significant, the estimate does not include the costs of family, informal, or unpaid caregiving provided to patients with CVD. In this analysis, we estimated projections of costs of informal caregiving attributable to CVD for 2015 to 2035. Methods: We used data from the 2014 Health and Retirement Survey to estimate hours of informal caregiving for individuals with CVD by age/sex/race using a zero-inflated binomial model and controlling for sociodemographic factors and health conditions. Costs of informal caregiving were estimated separately for hypertension, coronary heart disease, heart failure, stroke, and other heart disease. We analyzed data from a nationally representative sample of 16 731 noninstitutionalized adults ≥54 years of age. The value of caregiving hours was monetized by the use of home health aide workers’ wages. The per-person costs were multiplied by census population counts to estimate nation-level costs and to be consistent with other American Heart Association analyses of burden of CVD, and the costs were projected from 2015 through 2035, assuming that within each age/sex/racial group, CVD prevalence and caregiving hours remain constant. Results: The costs of informal caregiving for patients with CVD were estimated to be $61 billion in 2015 and are projected to increase to $128 billion in 2035. Costs of informal caregiving of patients with stroke constitute more than half of the total costs of CVD informal caregiving ($31 billion in 2015 and $66 billion in 2035). By age, costs are the highest among those 65 to 79 years of age in 2015 but are expected to be surpassed by costs among those ≥80 years of age by 2035. Costs of informal caregiving for patients with CVD represent an additional 11% of medical and productivity costs attributable to CVD. Conclusions: The burden of informal caregiving for patients with CVD is significant; accounting for these costs increases total CVD costs to $616 billion in 2015 and $1.2 trillion in 2035. These estimates have important research and policy implications, and they may be used to guide policy development to reduce the burden of CVD on patients and their caregivers.

Projected costs of informal caregiving for cardiovascular disease: 2015 to 2035: A policy statement from the American Heart Association

Files necessary to estimate non-housing consumption, housing consumption for renters and owners, as well as the wealth profile for the latter, as well as further results described in the paper. Warning, the file is large, but does not contain the data from the Consumer Expenditure Survey and the Survey of Consumer Finances

Code and data files for "Consumption over the Life Cycle: How Different is Housing?"

This article studies the impact of changing job skills on career earnings dynamics for college graduates We measure changes in the skill content of occupations between 2007 and 2019 using detailed job descriptions from a near universe of online job postings We then develop a simple model where the returns to work experience are a race between on-the-job learning and skill obsolescence Obsolescence lowers the return to experience, flattening the age-earnings profile in faster-changing careers We show that the earnings premium for college graduates majoring in technology-intensive subjects such as computer science, engineering, and business declines rapidly, and that these graduates sort out of faster-changing occupations as they gain experience

Earnings Dynamics, Changing Job Skills, and STEM Careers

The saving patterns of retired US households pose a challenge to the basic life-cycle model of saving. The observed patterns of out-of-pocket medical expenses, which rise quickly with age and income during retirement, and heterogeneous life span risk can explain a significant portion of US saving during retirement. However, more work is needed to distinguish these precautionary saving motives from other motives, such as the desire to leave bequests. Progress toward disentangling these motivations has been made by matching other features of the data, such as public and private insurance choices. An improved understanding of whether intended bequests left to children and spouses are due to altruism, risk sharing, exchange motivations, or a combination of these factors is an important direction for future research.

/pdf/savings-after-retirement-a-survey-2rvfdqvfe2.pdf

Savings After Retirement: A Survey

We propose a dynamic non-cooperative framework for long-term-care (LTC) decisions of families and use it to evaluate LTC policy options for the U.S. We first document the importance of informal caregiving and economic determinants of care arrangements. We then build a heterogeneous-agents model with imperfectly-altruistic overlapping generations to account for the patterns we find. A key innovation is the availability of informal care (IC), which is determined through intra-family bargaining. This opens up a new margin in response to policy and allows for informal insurance through home-production of care. Our calibrated model captures the observed care arrangements well. We study the implications of non-means-tested IC and formal care (FC) subsidies as well as changes to means-tested Medicaid. We find that IC responds strongly to these policies. An IC subsidy substantially reduces reliance on Medicaid, while the reduction of tax revenues due to lower labour supply by caregivers is modest. There are large welfare gains from a combination of IC and FC subsidies, even when combined with a reduction of the Medicaid program.

/pdf/evaluating-long-term-care-policy-options-taking-the-family-3n61xwnnor.pdf

Evaluating Long-Term-Care Policy Options, Taking the Family Seriously

Large cross‐country variation in long‐term‐care (LTC) policy in conjunction with household‐level data on caregiving provides a valuable laboratory for policy analysis. However, there is a lack of comprehensive cross‐country data on how care is provided. In order to close this gap, we draw on data from the Survey of Health, Ageing, and Retirement in Europe (SHARE) and the Health and Retirement Study (HRS) in the United States. Because care hours are missing for some care forms (especially for nursing‐home residents), we propose a selection model to impute these. The model allows selection into care forms to differ by country. Our estimates imply that nursing‐home residents have higher care needs, even when conditioning on observed characteristics. In contrast to the bulk of the literature, we also take into account care provision from persons in the same household, and we find that this contributes one‐third of all care hours. Informal‐care provision in Europe follows a steep North–South gradient, with the United States falling in between Central European and Southern European countries. The results are robust to alternative imputation schemes.

Long‐Term Care Across Europe and the United States: The Role of Informal and Formal Care

https://www.economicdynamics.org/meetpapers/2009/paper_573.pdf

A dynamic model of altruistically-motivated transfers

How do families behave dynamically? We provide a framework for studying economic problems in which family behavior is essential. Our key innovation is the inclusion of imperfectly altruistic agents in an otherwise standard consumption– savings problem with exogenous income risk. This gives rise to altruistic transfers and strategic behavior in the consumption–savings decision. We study the Markov-perfect equilibrium that arises from the limit of equilibria in a sequence of finite games. The equilibrium’s transfer patterns are empirically plausible. Furthermore, agents overconsume relative to the social optimum. In contrast to twoperiod models, both the richer and the poorer players overconsume long before transfers actually occur. The poorer agent also faces incentives to engage in excessive risk-taking because losses from a gamble are absorbed by both while gains are enjoyed alone. Keywords. Altruism, inter vivos transfers, consumption–savings decision, differential games. JEL classification. C73, D1, D64, E21.

/pdf/altruistically-motivated-transfers-under-uncertainty-55wtjdmw8u.pdf

Altruistically motivated transfers under uncertainty

I combine an infinite-horizon version of Ben-Porath’s (1967) model of human-capital accumulation with a vintage structure as in Chari & Hopenhayn (1991). Different skill levelsinside a vintage are complementary in production. Vintage-specific human capital is accumulated based on workers’ optimal strategies and is lost when the technology is phased out by an endogenous firm decision. I establish equivalence between competitive equilibrium and a planner’s problem. It is shown that returns to skill are highest in young vintages. Accelerated technological change shortens the life cycle of a technology and speeds up obsolescence; the premium on tenure rises because more workers are concentrated in young technologies with high skill premia. A calibration exercise comparing two steady states shows that the model quantitatively accounts for the changes in the experience premium, earnings dispersion and earnings turbulence in German data.

Matthias Kredler

Papers

Evaluating Long-Term-Care Policy Options, Taking the Family Seriously

Long‐Term Care Across Europe and the United States: The Role of Informal and Formal Care

A dynamic model of altruistically-motivated transfers

Altruistically motivated transfers under uncertainty

Experience vs. Obsolescence: A Vintage-Human-Capital Model