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

33 Pages Posted: 9 Dec 2010

See all articles by Johannes Schwarze

Johannes Schwarze

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

Christoph Wunder

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

Multiple version iconThere are 2 versions of this paper

Date Written: November 2010

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 the woman’s utility is higher if her husband is alive. Using self-reported satisfaction measures from a long-running German panel survey, the Socio-Economic Panel Study (SOEP), the present study conducts an empirical test of this assumption. Our matching-based estimation reveals satisfaction trajectories of women who experience the death of their spouse and identifies the causal effect of widowhood. The average level of satisfaction in a control group of non-widowed women serves as a reference to measure the degree of adaptation to widowhood. The results suggest bereavement has no enduring effect on satisfaction, and that is evidence against Posner’s assumption.

Keywords: widowhood, adaptation, subjective well-being, life satisfaction, satisfaction with household income, propensity score matching

JEL Classification: C14, D10, I31

Suggested Citation

Schwarze, Johannes and Wunder, Christoph, Is Posner Right? An Empirical Test of the Posner Argument for Transferring Health Spending from Old Women to Old Men (November 2010). SOEPpaper No. 335, Available at SSRN: https://ssrn.com/abstract=1722532 or http://dx.doi.org/10.2139/ssrn.1722532

Johannes Schwarze

University of Bamberg ( email )

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Bamberg 96045
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German Institute for Economic Research (DIW Berlin)

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IZA Institute of Labor Economics

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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 )

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Bamberg 96045
Germany

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