The Effects of the Financial Crisis on the Well-Being of Older Americans: Evidence from the Cognitive Economics Study

34 Pages Posted: 16 Nov 2010

See all articles by Matthew D. Shapiro

Matthew D. Shapiro

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 1, 2010

Abstract

This paper uses the Cognitive Economics Study (CogEcon) to assess the effect of the financial crisis on the well-being of older Americans. Financial wealth fell by about 15 percent for the median household. These financial losses were concentrated among households with high levels of wealth and high cognitive capacities, who tend to have higher exposure to the stock market. Nonetheless, households with little financial wealth suffered declines in well-being-measured by declines in consumption-as large on average as households with substantial exposure to the stock market. Tight credit market conditions and adverse labor market outcomes account for much of the effect of the financial crisis on the consumption of these low-wealth households.

Suggested Citation

Shapiro, Matthew D., The Effects of the Financial Crisis on the Well-Being of Older Americans: Evidence from the Cognitive Economics Study (September 1, 2010). Michigan Retirement Research Center Research Paper No. 2010-228. Available at SSRN: https://ssrn.com/abstract=1710064 or http://dx.doi.org/10.2139/ssrn.1710064

Matthew D. Shapiro (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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