Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108IN TROD UCTIO N 14 can also track trends in age-adjusted health and function, and they can investigate whether or not smoking, alcohol use, and fitness behaviors are changing. Use of the survey to study trends over time depends less on following individuals as they age and more on comparisons of similarly situated individuals at different points in time. Understanding Group Differences By representing the U.S. population as a whole, the HRS provides researchers a way to exam- ine and compare circumstances across income, racial/ethnic, gender, and other subgroups. For example, the financial resources of people with the least income and those at the median and in the highest income bracket can be compared. The data can be used to contrast outcomes for people who have suffered heart attacks with those of people who develop diabetes, dementia, arthritis, or cancer. They also permit targeted analyses of the characteristics of people whose health status or poverty may make them particularly vulnerable, including the study of how well government safety nets protect vulnerable individuals. The data further can look at differences among married and unmarried people; those with and without children; and those who retire young, who retire at typical ages, and who continue working past standard retirement ages. Exploring Causality The HRS survey design supports analyses of what causes things to happen. Collection of such a wide range of information about families over time enables analyses of how older adults’ circumstances change and how one dimension of their lives relates to other dimensions. For instance, it is interesting that many Americans choose to retire at relatively young ages, but criti- cal questions for policymakers are why people retire young and whether they can support them- selves over the course of long retirement spans. As HRS data accumulate over time, scientists hope to understand better a broad array of causal issues. For example, the HRS data might be used to determine specifically why some older Americans fall into poverty, the propensity for certain smokers to quit while others continue smoking, factors that lead some people to leave large bequests and others none, the effect of employer-provided health insurance or “Medigap” insurance on retirement decisions or the use of medical services, and why people with similar functional ability choose differ- ent living arrangements and different forms of care. The data can also be used to explore the reasons why some people save far more than others, even if they have equivalent salaries and life circumstances. Additionally, HRS analyses can identify obstacles that delay retirement in order to pay for the extra years of life, given the rise in life expectancy and improved health. Simulating Policy Outcomes Armed with some knowledge of causality, researchers can use the HRS data to simulate what might happen under different policy scenarios and the likely implications of aging- related policy reforms. For example, they can ask: What will happen to decisions about work at older ages as the earnings test on Social Security benefits is eliminated? What would happen to retirement decisions if the age of eligibility for early Social Security benefits were increased from 62 to 65? To what extent would the economic circumstances of widows be affected if Social Security survivorship benefits were increased? What is the impact of the new Medicare Part D prescription drug benefit? What would happen to saving rates if the contribution limits on individual retirement accounts were raised? Study Innovations The HRS is unique because of several survey innovations. These include: Measurement of Income and Assets Surveys asking about income and assets histori- cally have been troubled by participants’ refusal to answer financial questions or inability to answer them knowledgeably. Further, many surveys also have not accounted for major components of assets or income and/or have used measures that do not truly reflect assets and income. The HRS has made major advances in both of these areas. The study developed a technique known as “random-entry bracketing,” which reduces the number of nonresponses by eliciting ranges of values from respondents who would otherwise give no information at all. To improve the mea- surement of income from assets, the survey brought together questions about the ownership of certain assets (e.g., stocks and bonds) and the income obtained from those assets. In addi- tion, traditional measures of income and wealth have been integrated with detailed data about Social Security, pensions, and other future entitlements—a significant accomplishment of the HRS, particularly because future entitlements represent a major component of the financial status of older Americans. These new methods have been widely adopted by many other surveys. Examination of Participants’ Expectations The decisions people make as they age are influenced not only by past and current circum- stances, but also by what they expect to happen in the future. Most surveys focus on measuring current circumstances and, to some extent, what people can remember about the past. An exciting innovation in the HRS is the exploration of partici- pants’ future expectations. This novel approach yields valuable information about how long people