TY - RPRT T1 - Household responses to disability shocks: Spousal labor supply, caregiving, and disability insurance Y1 - 2020 A1 - Siha Lee KW - Caregiving KW - Disability KW - Social Security KW - spousal labor supply AB - This paper examines married women’s time allocation to market hours and spousal care in the event of their husbands’ disability and its implications for evaluating the insurance value of the Social Security Disability Insurance (SSDI) program. First, I find that while spousal labor supply responses to husbands’ disability are small, wives spend a sizable amount of time in spousal care after their husbands become disabled. Motivated by these facts, I develop a dynamic model of married households that incorporates husbands’ disability status, wives’ time allocation choices, health state dependent utility, and the institutional features of SSDI. Counterfactual experiments indicate that caregiving needs substantially attenuate spousal labor supply responses and increase the insurance value of SSDI relative to its costs. Furthermore, policy reforms such as supplementary caregiving benefits can improve social welfare. JF - Canadian Labour Economics Forum Working Paper Series PB - University of Waterloo CY - Waterloo, Ontario UR - https://www.econstor.eu/bitstream/10419/215772/1/169428462X.pdf ER - TY - RPRT T1 - Bequest Motives and the Social Security Notch Y1 - 2019 A1 - Siha Lee A1 - Kegon T. K. Tan KW - Assets KW - Bequests KW - late life savings KW - Social Security AB - Bequests may be a key driver of late life savings behavior and more broadly, a determinant of intergenerational inequality. However, distinguishing bequest motives from precautionary savings is challenging. Using data from the Health and Retirement Study, we exploit an unanticipated change in Social Security benefits, commonly called the Social Security Notch, as an instrument to identify the effect of benefits on bequests. We show that an increase in benefits leads to a sizable increase in bequest amounts. We combine our instrumental variable estimates with a model of late life savings behavior that accounts for mortality risk and unobserved expenditure shocks to identify bequest motives. The model is used to analyze two counterfactuals. The results demonstrates the importance of bequest motives as a driver of late life savings by comparing asset profiles with and without utility from bequests. We find that roughly one-third of accumulated assets and bequests are attributable to bequest motives among retirees. Our second counterfactual features a more progressive Social Security benefits schedule that reduces benefits for the richest retirees. We show that although wealth declines, consumption remains largely unchanged since wealth generated by bequest motives acts as a cushion against benefit reduction. PB - Human Capital and Economic Opportunity Global Working Group UR - https://ideas.repec.org/p/hka/wpaper/2019-061.html ER - TY - THES T1 - Essays in health, labor supply, and savings in later life T2 - Economics Y1 - 2019 A1 - Siha Lee KW - Employment and Labor Force KW - Health Conditions and Status KW - Savings AB - Chapter 1 examines married women's time allocation to market hours and spousal care in the event of their husbands' disability and its implications for evaluating the insurance value of the Social Security Disability Insurance (SSDI) program. Using an event study approach, I find that while spousal labor supply responses to husbands' disability are small, wives spend a sizable amount of time in spousal care after their husbands become disabled, and the magnitude of this response is comparable to the increase in wives' labor supply in the event of their husbands' layoff. Motivated by these facts, I develop a dynamic model of married households that incorporates husbands' disability status, wives' time allocation choices, health state dependent utility, and the institutional features of SSDI. Counterfactual experiments indicate that the insurance value of SSDI relative to its costs is considerably higher when I take into account that spousal care significantly reduces the insurance role of wives' labor supply in the event of their husbands' disability. Chapter 2 is joint with Kegon K. T. Tan. We exploit an unanticipated change in Social Security benefits, commonly called the Social Security Notch, to distinguish bequest motives from precautionary savings. Our instrumental variable estimates show that an increase in benefits leads to a sizable increase in bequest amounts. Combining these estimates with a model of late-life savings behavior, we find that roughly two-fifths of accumulated assets and bequests are attributable to bequest motives among retirees. A more progressive Social Security benefits schedule that reduces benefits for the richest retirees has a modest impact on consumption since wealth acts as a cushion against benefit reduction. Chapter 3 studies the reasons behind why self-employment rates increase with age. I compare among three mechanisms that make self-employment more attractive to older workers than younger workers: 1) accumulated work experience that can be tailored into a feasible business idea, 2) greater difficulty in finding a wage-and-salary job once laid off, and 3) flexibility in working hours. I find that flexible working hours is the most important element in understanding transitions to self-employment and longer labor force attachment of self-employed workers. JF - Economics PB - University of Wisconsin CY - Madison, WI VL - PhD UR - http://proxy.lib.umich.edu/login?url=https://search.proquest.com/docview/2236454210?accountid=14667 ER -