Health and the share of wealth held in risky assets

This paper focuses on the correlation between negative health shocks and the households’ shareof wealth held in risky assets. By using U.S. data from the Health and Retirement Study, we try toestablish a link between negative health shocks and financial outcomes such as a household’s probabilityof owning risky assets and share of risky assets held. In our definition of a recent negative health shock,we include: cancer or malignant tumor diagnoses, stroke or transient ischemic attack, and heart attack,coronary heart disease, angina, congestive heart failure, or other heart problems. We find an importantnegative correlation between a negative health shock to the female and her household’s probabilityof owning risky assets and share of risky assets held, respectively. In contrast, we do not find acorresponding statistically significant correlation for males.