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The Lost Ones: The Opportunities and Outcomes of White, Non-college-educated Americans Born in the 1960s

Margherita Borella, Mariacristina De Nardi, Fang Yang


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book NBER Macroeconomics Annual 2019, volume 34, Martin S. Eichenbaum, Erik Hurst, and Jonathan A. Parker, editors
Conference held April 11-12, 2019
Forthcoming from University of Chicago Press
in NBER Book Series NBER Macroeconomics Annual

White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men's wages declined more than women's. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings, but the increase in out-of-pocket medical expenses increased them by more. Welfare losses, measured as a onetime asset compensation, are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47% to 58% of these losses, shorter life expectancies 25% to 34%, and higher medical expenses account for the rest.

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This chapter first appeared as NBER working paper w25661, The Lost Ones: the Opportunities and Outcomes of Non-College Educated Americans Born in the 1960s, Margherita Borella, Mariacristina De Nardi, Fang Yang
Commentary on this chapter:
  Comment, Richard Blundell
  Comment, Greg Kaplan
 
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