EXPENDITURE FLOWS NEAR WIDOWHOOD

University Of Utah, Salt Lake City UT

Investigators

Abstract

In recent years, considerable research has focused on describing the income dynamics of widowed women. Yet, we know little about the expenditure dynamics near the time of the death and how they may exacerbate or minimize the economic impact of widowhood. The purpose of the current investigation is to further our understanding of how the typical widow comes to have a lower level of needs-adjusted income by examining (1) if the probability of impending death translates into increases in expenditures, and (2) the extent to which total expenditures during this period outpace income. This study will examine expenditure and income flows in the periods immediately before and after the death of a spouse using data from 1980- 1996 panels of the Consumer Expenditure (CE) Survey. The expenditure and income flows for newly widowed households will be compared to two other groups: similarly aged, continuously married households and similarly aged, continuously widowed households. It is anticipated that households where a spouse is about to die will be spending more on health care and gift giving than otherwise comparable households where no death is about to occur. At the time of the death and in the periods immediately following the death, expenditure patterns may continue to deviate because of funeral expenses and because of delays in the billing of fees for health care procedures. In total, expenditures may outpace income for these newly widowed households. If we find this to be the case, it would suggest that expenses are being financed by partially drawing down on household wealth which may have long-term consequences for the surviving spouse's post-widowhood economic status. Bivariate descriptive work will serve as a departure point for multivariate descriptive analyses. The multivariate analyses will be used to identify the important covariates that are related to differences in expenditure patterns and income-expenditure gaps.