Publications

To examine the financial characteristics of residents in assisted living and independent living communities and to see how they currently pay for their care arrangements, we surveyed 2,617 residents in assisted living and independent living communities. We asked them how they pay for their current costs and verified their answers by examining self-reported information on their cost and income. Residents stated that they are largely paying for their community costs independently. Approximately one third of respondents reported using their assets and income to cover their current costs. The data supported the notion that individuals living in assisted living and independent living communities are largely mid- to high-income elderly. However, the cross-sectional analysis showed that length of time in the community was positively associated with paying for their expenses independently out of income, after controlling for many confounders including age, education, and lifetime earnings to try to rule out differential longevity and differential selection over time. Further longitudinal analysis is needed to understand the cause and the implications of the positive correlation between ability to pay one's bills out of income and the length of time in the community before conclusions about spend-down can be made.

Low take-up by elderly Americans in most means-tested federal programs is a persistent and puzzling phenomenon. This paper seeks to measure the causal effect of the benefit levels on elderly enrollment in two public assistance programs – the Supplemental Nutrition Assistance Program (SNAP) and the Supplemental Security Income (SSI) program – by using the variation in SNAP and SSI eligibility and benefit levels introduced by Social Security retirement benefits. Our findings are three-fold. First, the low take-up among the elderly is not driven by changes in the composition of the eligible pool: individuals who become eligible as they age exhibit average take-up patterns that are similar to those who were eligible before reaching Social Security benefit claiming ages. Second, Social Security has a significant impact on the use of public assistance programs among the elderly, because the increase in income decreases the potential benefits available from public programs. Third, we estimate different behavioral responses to SNAP and SSI programs: a $100 increase in SSI benefits leads to a 4-6-percentage-point increase in the probability of taking up SSI, but we are unable to estimate consistent results on how benefits impact the take up for SNAP. Together with the fact that eligible individuals who begin receiving Social Security benefits continue to participate in SSI more often than they maintain SNAP enrollment, we posit that the different estimated behavioral responses could be due to individual preferences for cash over in-kind transfers.

Disability Insurance waiting time varies from a few months to several years. We estimate the causal effect of longer waiting times on the use of five financial coping strategies. We find that SNAP benefits are the most responsive to longer waiting times. Moreover, while spousal employment is not responsive to longer wait times, spousal employment leads to longer waiting times, presumably because these applicants are more able to appeal. Together, these results suggest that coping strategies are used to both help applicants during the wait time and to extend the waiting time and increase their probability of success.