Expectations, Aging and Cognitive Decline
We use longitudinal data from the HRS to document general patterns in expectations with respect to aging in various domains and investigate the potential role of cognitive decline in those patterns. We focus on two aspects of expectations: optimism and uncertainty. We estimate the effect of age controlling for cohort, selection and calendar time effects. With the notable exception of survival expectations, we find that optimism decreases with age in most domains. Uncertainty appears to increase with age in most cases except for survival expectations, but these findings are less robust. Using methods that minimize the likelihood of spurious associations due to survey noise, we show that cognitive decline plays a modest but statistically significant role in explaining the decline of optimism with age, again, with the exception of survival expectations. We do not find a role for cognitive decline in accounting for the increase in uncertainty.
We are grateful to the Behavioral and Social Research Program of the National Institute on Aging for supporting the collection of the HRS data used in this paper through grant U01-AG09740 and for research support through NIA grant P01AG026571. We are also grateful to Péter Hudomiet for excellent research assistance.
Robert J. Willis
The primary sources of support for my research are from National Institutes of Health grants U01AG0009740 and P01AG026571. In addition, in the recent past I have received grants from Social Security Administration through the Michigan Retirement Research Center, from the Sloan Foundation and from Pfizer.