Association for Public Policy Analysis & Management

As is the case in many industrialized countries, the population in the United States is rapidly aging. It is predicted that more than 20 percent of the population will be over the age of 65 by 2029. While research has investigated a number of factors that impact the well-being of adults as they age, there remain many questions about interactions between health status, financial precarity, and the choices that households make or may be forced to make such as residential mobility. Understanding these relationships will be important to aging in place strategies and other policies that link important health and financial services to an aging population.

Investigating residential mobility pattern among older adults is also important in understanding the health of housing markets as younger generations enter the housing market. On one hand, more recent cohorts of older households are more likely to age in place compared to older generations, indicating that they are holding off more housing units off the market as potential housing supply for younger generations. On the other hand, millennials are buying fewer properties than previous generations due to delayed marriage and childbearing, increasing house prices, and stronger preferences towards living in high-cost cities (Choi et al., 2018). Myers, Lee and Simmons (2019) shows that the lagged effect of delayed marriage and recent income growth of millennials will mitigate the gaps in homeownership rate between generations in the near future.

In order to examine the determinants of residential mobility among older adults, this study takes advantage of the RAND HRS data (1992 to 2014), to uncover the relationship between health status (both physical disability and cognitional declines) and household financial precarity. The empirical model in this study employs proportional hazard model and multinomial logistic regression to examine the determinants residential mobility. Previous literature using PSID has shown that health status, marital status and child proximity play vital roles in elderly housing tenure transitions (Painter and Lee, 2009; Lee and Painter, 2014). With the extensive information in the HRS on household retirement income and wealth, detailed health status, health insurance coverage and intergenerational wealth transfers, we are able to encompass a focus on the interplay of health and financial precarity. The rich information on retirement income, household wealth, and health insurance will be used to construct measurement of household financial precarity in buffering uncertainties in post-retirement life. The detailed information helps this study investigate heterogeneous mobility patterns across various cohorts: the Good Times cohort, Children of Depression, War Babies, and Early Baby Boomers. Moreover, the longitudinal data structure enables us to better control for unobserved time-invariant factors affecting households’ housing wealth consumption portfolios. Most importantly, the uniquely detailed health data helps this study distinguish the impacts of functional limitations, mental depression, cognition declines and various types of diseases. Finally, the survey of HRS respondents’ children may help uncover additional information on the potential financial demands or assistance from their children in times of financial distress that will likely affect the probability of making a move.