Abstract: We examine how wealth shocks, in the form of inheritances, affect the mortality rates, health status and health behaviors of older adults, using data from eight waves of the Health and Retirement Survey (HRS). Our main finding is that bequests do not have substantial effects on health. This absence occurs despite increases in out-of-pocket (OOP) spending on health care spending and in the utilization of many types of medical services. Nor can we find a convincing indication of changes in lifestyles that offset the benefits of increased medical care. Inheritances are associated with higher alcohol consumption, but with no change in smoking or exercise and a possible decrease in obesity. A tentative conclusion is that inheritances do not affect the health of senior citizens.
Paper available here