How Does Increased Longevity for Men Affect Well-Being for Their Wives in Old Age?

Abstract

The marked increase in male longevity and the shrinking gap in male-female life expectancy in recent decades should improve the financial outcomes of older women, but this improvement may be dampened if the growth in medical spending and the incidence of disability translates to living husbands burdening the family’s budget.  Using the Health and Retirement Study and an endogenous switching model to account for non-random selection into widowhood, we find that widows are worse off than non-widows, and that women whose husbands die young have worse financial outcomes.  But his survival, if accompanied by ill health, hurts women’s financial well-being substantially: women married to men in poor health or with limitations in their daily activities have lower income and are more likely to fall below the poverty line, especially while the husband is still alive.  We also find that high end-of-life health care costs deplete the wealth that the husband leaves his widow.  Finally, we find that being poor in the past is more closely correlated with financial outcomes for married women than it is for widows, suggesting that widowhood may actually break the poverty cycle for some women.  The results emphasize the importance of policies like Social Security survivor benefits and Medicaid but also suggest that older couples may need further help to better manage an aging husband’s care needs.