Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men

33 Pages Posted: 20 Oct 2009

See all articles by Christoph Wunder

Christoph Wunder

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics; University of Bamberg

Johannes Schwarze

University of Bamberg; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Abstract

Posner (1995) proposes the redistribution of health spending from old women to old men to equalize life expectancy. His argument is based on the assumption that women's utility is higher if they are married. Thus, extending the lifespan of men would benefit women. Using life satisfaction data from the German Socio-Economic Panel Study (SOEP), we conduct an empirical test of this assumption. We apply a two-step estimation strategy: first, we use a propensity score matching approach to generate a control group of non-widowed women. The average level of life satisfaction in the control group serves as a reference to measure the degree of adaptation to widowhood. In the second step, the life satisfaction trajectories of both groups are estimated using penalized spline regressions. The results suggest bereavement has no enduring effect on life satisfaction, and that falsifies Posner's assumption.

Keywords: widowhood, adaptation, subjective well-being, life satisfaction, penalized spline regression, propensity score matching

JEL Classification: C14, D10, I31

Suggested Citation

Wunder, Christoph and Schwarze, Johannes, Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men. IZA Discussion Paper No. 4485, Available at SSRN: https://ssrn.com/abstract=1490507

Christoph Wunder (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

University of Bamberg ( email )

Feldkirchenstr. 21
Bamberg 96045
Germany

Johannes Schwarze

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg 96045
Germany
+49 951 863 2600 (Phone)
+49 951 863 5569 (Fax)

German Institute for Economic Research (DIW Berlin)

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Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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