Cognitive Skills, Numeracy and Retiree Health Care Expenditure

Published: 2010
Project ID: UM10-20


The well-being of retirees with lower cognitive ability and numeracy is at greater risk because they have lower incomes yet higher medical expenditures. Linking HRS data to administrative records, we will evaluate two hypotheses about why this group spends more on health: (1) they are in worse health; (2) they receive more expensive or less effective care for the same conditions. We will also assess the consequences of medical expenditures for their wealth and consumption. As health costs rise, the causes and consequences of medical spending in this group have important implications for policies aimed at securing their well-being in retirement.