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In this paper we document significantly steeper declines in nondurable expenditures in the UK compared to the US, in spite of income paths being similar. We explore several possible causes, including different employment paths, housing ownership and expenses, levels and paths of health status, and out-of -pocket medical expenditures. Among all the potential explanations considered, we find that those to do with healthcare – differences in levels, age paths, and uncertainty in medical expenses – are the main factor accounting for the steeper declines in nondurable expenses in the UK compared to the US.
Authors
CPP Co-Director
James is Senior Research Fellow and Professor of Economics at Manchester, working on broad issues in the economics of retirement, savings and health.
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
James Smith
Associate Director
Peter joined in 2009. He has published several papers on the microeconomics of household spending and labour supply decisions over the life-cycle.
Working Paper details
- DOI
- 10.1920/wp.ifs.2015.1512
- Publisher
- IFS
Suggested citation
Banks, J et al. (2015). Life-cycle consumption patterns at older ages in the US and the UK: can medical expenditures explain the difference?. London: IFS. Available at: https://ifs.org.uk/publications/life-cycle-consumption-patterns-older-ages-us-and-uk-can-medical-expenditures-explain (accessed: 29 March 2024).
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