The American Way of Aging: An Event History Analysis
NBER Working Paper No. 2892
The paper presents a methodology for studying the sequence and timing of life events past age 65. After estimating models of marital status, disability, living arrangements and income from the scattered segments of old age captured within the 17 year window of the Panel Study of Income Dynamics (PSID), we simulated up to 35 years of old age, using a sample of those turning 65 between 1980 and 1984" The simulated life expectancies correspond quite well with life-table estimates published by the National Center for Health Statistics. Even in this initial effort, we report some interesting findings: First, the prospects for rich and poor at age 65 were very different, those with high incomes living 4 years longer than those with low incomes. Second, women who were ever institutionalized were hardly identifiable at age 65, having similar income, marital status and disability status as other women at age 65. Third, women are much more vulnerable to changes in marital status, suffering a permanent 20% decline in their standard of living upon widowhood compared to a 10% decline for men. Fourth, poor widows at age 80 were likely to have been widows or poor already when they turned 65.