Current Awareness in Aging Research (CAAR) Report #213--November 20, 2003


CAAR (Current Awareness in Aging Research) is a weekly email report produced by the Center for Demography of Health and Aging at the University of Wisconsin-Madison that helps researchers keep up to date with the latest developments in the field. For more information, including an archive of back issues and subscription information see:


I. Data:

1. LUXEMBOURG INCOME STUDY: The Luxembourg Income Study has recently added an interactive web tabulator for its data. "This service permits registered LIS users to design and create tables based on the underlying LIS data sets. At the moment we are only able to provide a limited number of datasets and a restricted set of variables as not all member countries have agreed to permit access through our web service. The variables selected for inclusion in this first version of the tabulator cover basic demographic, income, and poverty measures that are key elements of the LIS data. In the future we hope to be able to provide access to an expanded group of data sets and to include a large subset of variables." Note that"all restrictions related to the use of data derived from the LIS data apply to the tabulations generated through these new services," and that users must register with LIS, and obtain a userid and password before access is allowed.


II. Reports and articles:

2. HEALTH AFFAIRS ARTICLE ABSTRACT: "The Effects of Cash and Counseling on Personal Care Services and Medicaid Costs in Arkansas," by Stacy Dale, Randall Brown, Barbara Phillips, Jennifer Schore, and Barbara Lepidus Carlson (_Health Affairs_, November 2003, .pdf and HTML format, p. W3-566 to W3-575).

DHHS press release:

"People Eligible for Medicaid Personal Care Services Get More Home Care and Use Nursing Homes Less When They Direct Their Own Care, Study Finds," (Nov. 19, 2003).

3. CDC MMWR: "Public Health and Aging: Health-Related Quality of Life Among Low-Income Persons Aged 45--64 Years --- United States, 1995--2001," (US Centers for Disease Control, Morbidity and Mortality Weekly Report, Vol. 52, No. 46, November 21, 2003, .pdf and HTML format, p. 1120-1124).



4. PERSPECTIVES ON LABOUR AND INCOME/STATISTICS CANADA ARTICLE ABSTRACT: "Finances in the golden years," by Cara Williams (_Perspectives on Labour and Income_, Vol. 4, No. 11, November 2003).

Press Release:

5. NIA REPORT: "Publicly available databases for aging-related secondary analyses in the behavioral and social sciences," (National Institute on Aging, 2002, .pdf format, 174p.).


A. "Measuring the health of nations: analysis of mortality amenable to health care," by Ellen Nolte and Martin McKee (_British Medical Journal_, Vol. 327, No. 7424, November 15, 2003, .pdf and HTML format, p. 1129-1132).

B. "Hyperkalaemia and impaired renal function in patients taking spironolactone for congestive heart failure: retrospective study," by Morten Svensson, Finn Gustafsson, Sren Galatius, Per R Hildebrandt, and Dan Atar (_British Medical Journal_, Vol. 327, No. 7424, November 15, 2003, .pdf and HTML format, p. 1141-1142).

7. _JAMA_ ARTICLE ABSTRACT: "Predicting Mortality Among Patients Hospitalized for Heart Failure: Derivation and Validation of a Clinical Model," by Douglas S. Lee, Peter C. Austin, Jean L. Rouleau, Peter P. Liu, David Naimark, and Jack V. Tu (_Journal of American Medical Association_, Vol. 290, No. 19, November 19, 2003, .pdf and HTML format, p. 2581-2587).

8. _MEDSCAPE_ ARTICLE: Note: Medscape requires free registration before providing articles.

A. "Pharmacokinetic Study in Women of Three Different Doses of a New Formulation of Oral Testosterone Undecanoate, Andriol Testocaps," by Natalie S. Houwing, Frans Maris, Peter G. Schnabel,and Wilma M. Bagchus (_Pharmacotherapy_, Vol. 23, No. 10, 2003, p. 1257-1265, via Medscape).

B. "Racial Differences in Initial Treatment for Clinically Localized Prostate Cancer," by Richard M. Hoffman, Linda C. Harlan, Carrie N. Klabunde, Frank D. Gilliland, Robert A. Stephenson, William C. Hunt, and Arnold L. Potosky (_Journal of General Internal Medicine_, Vol. 18, No. 10, 2003, p. 845-853, via Medscape).

9. KAISER FAMILY FOUNDATION REPORT: "Designing a Medicare Drug Discount Card: Implications of Policy Choices for Medicare Beneficiaries and Plan Sponsors," (Kaiser Family Foundation, November 2003, .pdf format, 31p.).

From the Executive Summary:

This report analyzes key issues surrounding the implementation of a Medicare-endorsed prescription drug discount card program. Medicare prescription drug discount cards have been proposed as a short-term strategy for lowering prescription drug costs for Medicare beneficiaries. The report considers the implications for both discount card sponsors and beneficiaries of alternative program designs, including such features as the annual lock-in for consumers, exclusive formularies, providing comparative information to consumers about drug prices and discounts, administration of low-income subsidies, and the short duration of the program.


A. "AARP Endorses Medicare Prescription Drug Bill" (Nov. 17, 2003).

B. "Statement by AARP CEO Bill Novelli on Medicare Legislation Proposal" (Nov. 16, 2003).

11. AOA NEWSLETTER: "AoA e-News," (US Administration on Aging, November 2003, Microsoft Word and .pdf format, 9p.).


III. Working Papers:

12. NBER:

A. "The Developed World's Demographic Transition - The Roles of Capital Flows, Immigration, and Policy," by Hans Fehr, Sabine Jokisch, and Laurence Kotlikoff (National Bureau of Economic Research w10096, November 2003, .pdf format, 40p.).


The developed world stands at the fore of a phenomenal demographic transition. Over the next 30 years the number of elderly in the U.S., the EU, and Japan will more than double. At the same time, the number of workers available to pay the elderly their government-guaranteed pension and health care benefits will rise by less than 10 percent. The fiscal implications of these two demographic trends are alarming. Paying promised benefits will, it appears, require a doubling or more of payroll tax rates. This paper asks if there is a silver lining in this dark cloud hanging over the developed world. Specifically, can the developed economies hope to be bailed out by either macroeconomic feedback effects or by increased migration?

To address these questions, this paper develops and simulates a dynamic, intergeneration, and interregional demographic life-cycle model. The model has three regions the U.S., the EU, and Japan which exchange goods and capital. The model features immigration, age-specific fertility, life span extension, life span uncertainty, bequests arising from incomplete annuitization, and intracohort heterogeneity.

Other things equal, one would expect the aging of the developed economies to increase capital per worker as the number of suppliers of capital (the old) rises relative to the number of suppliers of labor (the young). But given the need to pay the elderly their benefits, other things are far from equal. According to our simulations, the tax hikes needed to finance benefits along the demographic transition path generate a major capital shortage that lowers real wages by 19 percent and raises real interest rates by over 400 basis points. Hence, far from mitigating the developed worlds fiscal problems, macroeconomic feedback effects make matters significantly worse.

The simulations also show that increased immigration does very little to mitigate the fiscal stresses facing the developed world. On the other hand, there are policies that can materially improve the developed worlds long-term prospects. The one examined here is closing down, at the margin, existing government pension systems and using consumption taxes to pay off those programs accrued liabilities. This policy could be coupled with the establishment of a fully funded mandatory individual saving system. According to our simulations, this policy would impose modest welfare losses on current generations, but generate enormous welfare gains for future generations. Future Europeans and Japanese benefit the most. Their net wages almost triple, and their welfare levels double compared with the no-reform scenario.

Click on "PDF" or submit your email address for full text.

B. "Grasshoppers, Ants, and Pre-Retirement Wealth: A Test of Permanent Income," by Erik Hurst (National Bureau of Economic Research w10098, November 2003, .pdf format, 41p.).


This paper shows that households who enter retirement with low wealth consistently followed non-permanent income consumption rules during their working years. Using the Panel Study of Income Dynamics (PSID), household wealth in 1989 is predicted for a sample of 50-65 year olds using both current and past income, occupation, demographic, employment, and health characteristics. Using the residuals from this first stage regression, the sample of pre-retired households is subsetted into households who save 'lower' than predicted and all other households. The panel component of the PSID is then used to analyze the consumption behavior of these households early in their lifecycle. It is shown that these low pre-retirement wealth households had consumption growth that responded to predictable changes in income during their early working years. No such behavior was found among the other pre-retired households. Moreover, the low wealth residual households responded both to predictable income increases as well as predictable income declines, a result that is inconsistent with a liquidity constraints explanation. After ruling out other theories of consumption to explain these facts, it is concluded that households who entered retirement with lower than predicted wealth consistently followed near sighted consumption plans during their working lives.

Click on "PDF" or submit your email address for full text.

C. "The Role of Retiree Health Insurance in the Employment Behavior of Older Men," by David M. Blau and Donna B. Gilleskie (National Bureau of Economic Research w10100, November 2003, .pdf format, 55p.).


We model the employment and medical care decisions of older men who face health risk. The budget constraint incorporates detailed characteristics of health insurance as well as Social Security and private pensions. A man whose health insurance is tied to continued employment with his current employer faces the risk of large medical expenditures in the event of an adverse health shock if he retires before becoming eligible for Medicare at age 65. A man whose employer provides retiree health insurance or who has access to other health insurance not tied to his employment decision (e.g., from his wife) can retire before age 65 without consequences for his health insurance coverage. We use data from the Health and Retirement Survey to estimate the parameters of the model using structural methods. Simulations based on the estimates imply that changes in health insurance, including access and restrictions to retiree health insurance and Medicare have a modest impact on employment behavior among older males.

Click on "PDF" or submit your email address for full text.


A. "Motivating Retirement Planning: Problems and Solutions," by Gary W. Selnow (WP 2003-07, November 2003, .pdf format, 15p.).


People often find it difficult to make the right decision about retirement savings. The payoffs are in the distant future, and the promise of pleasure tomorrow can mean pain today. The wrong decision yields an instant gain, the outcome is uncertain, the decision can be postponed without immediate penalty. In the end, the pressures of immediate gratification, delayed benefit, the unknown, the uncertain, the uncomfortable, ally against wise decisions. Yet, while many people yield to these influences, many others make the right choice. That drives us to ask why. Recent research has examined various approaches to promoting retirement investment. One promising strategy, automatic enrollment, taps into an old theory about the functional order of behavior and attitudes. This chapter examines the theory to understand why automatic enrollment has a good chance of overcoming the natural impediments to wise decisions about retirement investments.

B. "Who's Afraid of a Poor Old-Age? Risk Perception in Risk Management Decisions," by Elke U. Weber (WP 2003-08, November 2003, .pdf format, 23p.).


Retirement planning and voluntary as well as mandated contributions to pension plans require a series of decisions under uncertainty. Those range from initial decisions about the magnitude of contributions and allocation across different investment options and choice of option providers, to periodic reviews of these decisions in light of possible changes in goals or circumstances. Behavioral decision research provides a series of lessons about how such decisions are made and thus for the optimal design of pension plans. This chapter will address the role of affect in perceptions of risk and subsequent decisions to take actions that reduce or manage perceived risks. I review evidence showing that individual and group differences in risk perception, much more than differences in risk attitude, are responsible for differences in the choices people make. If people fail to be alarmed about a risk or hazard, they fail to take precautions. Risk perception, on the other hand, is predictable from general characteristics of the hazard and from prior, personal history. The risks associated with inadequate retirement planning have all the characteristics associated with hazards that do not evoke strong visceral reactions.

IV. Journal Tables of Contents (check your library for availability):

14. American Journal of Sociology (Vol. 109, No. 1, July 2003). Note: Full electronic text of this journal is available in the ProQuest Research Library. Check your library for the availability of this database and this issue.

15. INGENTA Tables of Contents: INGENTA provides fee based document delivery services for selected journals.

A. Point your browser to:

B. click on "browse by publication"
C. Click the "fax/ariel" radio button, type the Journal Name in the "by words in the title" search box and click "search".
D. View the table of contents for the issue noted.

Canadian Journal on Aging (Vol. 22, No. 3, 2003).

Educational Gerontology (Vol. 29, No. 9, 2003). Note: Full electronic text of these journals is available in the EBSCO Host Academic Search Elite. Check your library for the availability of this database and these issues.

Social Work (Vol. 48, No. 4, 2003). Note: Full electronic text of these journals is available in the ProQuest Research Library. Check your library for the availability of this database and these issues.

16. AMEDEO MEDICAL LITERATURE: Note: "AMEDEO has been created to serve the needs of healthcare professionals, including physicians, nurses, pharmacists, administrators, other members of the health professions, and patients and their friends. They can easily access timely, relevant information within their respective fields... All AMEDEO services are free of charge. This policy was made possible thanks to generous unrestricted educational grants provided by AMGEN, Berlex, Eisai, Glaxo Wellcome, Novartis, Pfizer, Roche, and Schering AG."

A. Osteoporosis: Literature for the week of November 18, 2003:

B. Alzheimer's Disease: Literature for the week of November 18, 2003:

C. Parkinson's Disease: Literature for the week of November 18, 2003:

D. Prostate Cancer: Literature for the week of November 18, 2003:

AMADEO Literature Guide:


V. Books/Bibliography:

17. IMF: "Who Will Pay? Coping with Aging Societies, Climate Change, and Other Long-Term Fiscal Challenges," by Peter S. Heller (International Monetary Fund, November 2003, 330p.). Note: The Introduction and Foreword are available in .pdf format. The book must be purchased from IMF.

Ordering information:

18. NAP: "Technology for Adaptive Aging: Report and Papers," edited by Richard Pew and Susan Van Hemel (National Research Council, National Academies Press, 2003, OpenBook browsable and searchable format, 360p.). Note: Purchasing information is available at the site.

19. HRS BIBLIOGRAPHY UPDATE: The following items have recently been added to the University of Michigan Institute for Social Research Health and Retirement Survey bibliography:

Journal Articles:

Bernheim, B. D., Forni, L., Gokhale, J., and Kotlikoff, L. J., The Mismatch Between Life Insurance Holdings and Financial Vulnerabilities: Evidence from the Health and Retirement Study. American Economic Review, vol. 93, pp. 354-365, 2003.

Friedberg, L., The Impact of Technological Change on Older Workers: Evidence from Data on Computer Use. Industrial and Labor Relations Review, vol. 56, pp. 511-529, 2003.

Chand, H. and Gan, L., The Effects of Bracketing in Wealth Estimation. Review of Income and Wealth, vol. pp. 273-287, 2003.

Fonda, S. J., Fultz, N. H., Jenkins, K. R., Wheeler, L. M., and Wray, L. A., Relationship of Body Mass and Net Worth for Retirement-Aged Men and Women. Research on Aging, vol. 26, Forthcoming.

Goldman, D. P. and Zissimopoulos, J. M., DataWatch: High Out-of-Pocket Spending by the Elderly. Health Affairs, vol. 22, pp. 194-202, 2003.

Lum, Y. S. and Lightfoot, E., The Effect of Health on Retirement Saving Among Older Workers. Social Work Research, vol. 27, pp. 31-44, 2003.

Siegel, M., Bradley, E. H., Gallo, W. T., and Kasl, S. V., Impact of Husbands' Involuntary Job Loss on Wives' Mental Health, Among Older Adults. Journals of Gerontology, Series B: Psychological Sciences and Social Sciences, vol. 58, pp. S30-S372003.

Jenkins, K. R., Fultz, N. H., Fonda, S. J., and Wray, L. A., Patterns of Body Weight in Middle-Aged and Older Americans by Gender and Race, 1993-2000. Sozial-und Praventivmedizin, vol. 48, pp. 257-268, 2003.

Pelkowski, J. M. and Berger, M. C., The Onset of Health Problems and the Propensity of Workers to Change Employers and Occupations. Growth and Change, vol. 34, pp. 276-298, 2003.

Bond, S. A., Krueger, P. M., Rogers, R. G., and Hummer, R. A., Wealth, Race, and Mortality. Social Science Quarterly, vol. 84, pp. 667-684, 2003.

Pienta, A. M., Partners in Marriage: An analysis of husbands' and wives' retirement behavior. Journal of Applied Gerontology, vol. 22, pp. 340-358, 2003.

Viscusi, W. K. and Hakes, J. K., Risk Ratings that Do Not Measure Probabilities. Journal of Risk Research, vol. 6, pp. 23-43, 2003.

Siegel, M., Bradley, E. H., and Kasl, S. V., Self-rated Live Expectancy as a Predictor of Mortality: Evidence from the HRS and AHEAD surveys. Gerontology, vol. 49, pp. 265-271, 2003

Shuey, K. and Hardy, M. A., Assistance to Aging Parents and Parents-in-Law: Does lineage affect family allocation decisions? Journal of Marriage and the Family, vol. 65, pp. 418-431, 2003.


Coile, C. and Gruber, J., Fiscal Effects of Social Security Reform in the United States 2003. Center for Retirement Research at Boston College WP #2003-05.

Stephens Jr., M. and Haider, S.J., Can Unexpected Retirement Explain the Retirement-Consumption Puzzle? Evidence from Subjective Retirement Expectations 2003. Center for Retirement Research Working Paper #2003-15. Boston College. Center for Retirement Research at Boston College.

Munnel, A.H., Cahill, K.E., and Jivan, N.A., How Has the Shift to 401(k)s Affected the Retirement Age? 2003. Center for Retirement Research. Boston College. Center for Retirement Research at Boston College Issue Brief #13.


VI. Legislation Information Updates:

20. US SENATE BANKING, HOUSING, AND URBAN AFFAIRS HEARING PUBLICATION: "The Preliminary Findings of the Commission on Affordable Housing and Health Facility Needs for Seniors, on How We Can Work Better to Meet the Needs of a Growing Senior Population in this Country," a hearing held June 27, 2002 (S.Hrg. 107-985, .pdf and ASCII text format, 28p.).

Scroll down to or "find in page" "107-985" (without the quotes).


VII. Websites of Interest:

21. KAISER FAMILY FOUNDATION CALCULATOR: "Medicare Drug Benefit Calculator," (Kaiser Family Foundation, November 2003). Note: "This calculator allows users to enter their prescription drug costs to determine what they would pay under the Medicare reform proposal currently being considered in Congress. Enter annual drug costs below and click on the 'Calculate' button."




Charlie Fiss
Information Manager
Center for Demography and Ecology and
Center for Demography of Health and Aging
Rm. 4470A Social Science Bldg
1180 Observatory Drive
Madison, WI 53706-1393
Phone: (608) 265-9240
Fax: (608) 262-8400