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Household Finance and Life-Cycle Economic Decisions under the Shadow of Cancer

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  • Kárpáti, D.;
Abstract
I study the causal effects of life expectancy on financial, economic, and demographic decisions. My sample consists of individuals who undergo genetic testing for a hereditary cancer syndrome. Genetic testing randomizes tested persons into two groups. Those who test positive learn that they face a high risk of cancer and a shorter life expectancy. Those who test negative learn that their cancer risk is similar to that of the general population. The differences in outcomes between these two groups identify the effects of life expectancy. I find that life expectancy has a positive effect on wealth accumulation. Lower savings rates, safer portfolios, decreased labor supply, and different preferences for household composition explain lower wealth accumulation under reduced life expectancy.

Suggested Citation

  • Kárpáti, D.;, 2022. "Household Finance and Life-Cycle Economic Decisions under the Shadow of Cancer," Health, Econometrics and Data Group (HEDG) Working Papers 22/16, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:22/16
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    References listed on IDEAS

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    More about this item

    Keywords

    household finance; life expectancy; savings; labor supply; genetics;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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