Health Shocks, Out-of-Pocket Medical Expenses and Consumer Debt Among Middle-Aged and Older Americans

Hyungsoo Kim, Wonah Yoon, Karen A. Zurlo

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

We examine two important issues related to health and financial burden in middle-aged and older Americans: (1) whether or not new health events affect a consumer's unsecured debt, and (2) to what extent the associated out-of-pocket medical expenses (OOP) contribute to unsecured debt. We use six biennial waves (1998, 2000, 2002, 2004, 2006 and 2008) from the Health and Retirement Study (HRS). We estimated fixed effects models and conducted mediation analyses. We find that new health events affect the accumulation of unsecured debt. Our estimates suggest that new health events increase unsecured debt by 6.3% ($230) to 9.3 % ($339); approximately 20% of the increase in unsecured consumer debt comes from OOP when experiencing new health events. New severe health events increase debt for the 50-64 age group, but do not increase it for the 65+ group.

Original languageEnglish
Pages (from-to)357-380
Number of pages24
JournalJournal of Consumer Affairs
Volume46
Issue number3
DOIs
StatePublished - Sep 2012

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance
  • Sociology and Political Science

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