Federal Reserve Bank of Richmond
701 E Byrd St
Richmond, VA 23220
Institutional Affiliation: Federal Reserve Bank of Richmond
NBER Working Papers and Publications
|March 2020||Medical Spending, Bequests, and Asset Dynamics Around the Time of Death|
with John Bailey Jones, Mariacristina De Nardi, Eric French, Rory McGee: w26879
Using data from the Health and Retirement Survey, we document the changes in assets that occur before a person's death. Applying an event study approach, we find that during the 6 years preceding their deaths, the assets of single decedents decline, relative to those of similar single survivors, by an additional $20,000 on average. Over the same time span, the assets of couples who lose a spouse fall, relative to those of similar surviving couples, by an additional $90,000 on average. Households experiencing a death also incur higher out-of-pocket medical spending and other end-of-life expenses. This elevated spending is sufficient to explain (in accounting terms) the asset declines observed for singles but falls short of explaining the declines observed for couples. Bequests from the d...