Policy makers have a great desire for the elderly to age-in-place and use community and in-home resources rather than rely on expensive institutionalized care, although it remains unclear if where the elderly currently reside provides a safe and suitable environment.  In this study, we use data from the 2000-2010 waves of the Health and Retirement Study to investigate the factors leading to serious falls and preventative steps taken by older Americans (55+ years of age) to mitigate them, including housing safety modifications. We also use an individual’s expectation about their future health and proximity of nearby senior communities as instrumental variables to identify the causal impact of making a modification on future health outcomes. 

We find more than one-third of older Americans have experienced a serious fall that required a visit to the hospital and more than 13% of 80+ years have had broken a hip.  We also find only 16% of older Americans lived in handicapped accessible housing in 2010, down from a high of 17% in 2008.  However, the percentage of the elderly making modifications to their own home in order to age-in-place has increased significantly over the last decade, with almost one-third of such households living in units with a special safety feature. The most common safety features were grab bars (29%) and safety railings (13%).  The median expenditure for housing safety modification conducted was $800, although this was somewhat skewed with a mean expenditure of $2,260 by modifiers. 

It is unclear from using cross-sectional observational data alone why some households decided to make safety and accessibility modifications while others decided either to not make any modifications or move to already accessible senior communities.  To identify the causal effect of making modifications on health outcomes, we explicitly model the decision to make a modification based on socio-economic factors, previous and anticipated health status, and the supply of nearby senior communities. While recently modifying housing is correlated with worst health outcomes, we find making a previous safety modification and aging-in-place is associated with reduced falls and generally improved health outcomes after controlling for such factors.  The implications of the research are that there could be significant private and public cost savings if future aging-in-place policies specifically incorporated housing accessibility and safety modifications to recipient homes.