Do Wealth Shocks Matter for the Life Satisfaction of the Elderly? Evidence from the Health and Retirement Study

This note studies the determinants of life satisfaction for the elderly and near-elderly in the U.S., using data from the Health and Retirement Study. The econometric analysis exploits the 2008-09 financial crisis as a source of exogenous variation in wealth, caused by a long-lasting decrease in ass...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Cozzi, Marco, Li, Qiushan
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2020
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Summary:This note studies the determinants of life satisfaction for the elderly and near-elderly in the U.S., using data from the Health and Retirement Study. The econometric analysis exploits the 2008-09 financial crisis as a source of exogenous variation in wealth, caused by a long-lasting decrease in asset prices. Although absolute changes in wealth are not found to systematically affect individuals' well-being, losing 60% or more of the pre-crisis wealth negatively impacted measures of life satisfaction.