The Economics of Alzheimer’s Disease: Family Spillovers, Diagnosis, and Financial Consequences

Session Submission Type: Panel

Abstract

Alzheimer’s disease and related dementias (ADRD) impose enormous costs on individuals, families, and the healthcare system. As the population ages and prevalence rises, understanding the full scope of these costs, including those borne by family members, is essential for designing effective policy responses. This panel brings together three papers that examine the broader consequences of ADRD from complementary perspectives, focusing on spillover effects to spouses, the role of labor policy in facilitating earlier diagnosis, and the financial consequences of cognitive decline for household members.The first paper uses population-wide administrative data from Denmark and a matched event study design spanning 18 years to estimate the mental health and mortality effects of having a spouse with ADRD. The analysis reveals gradual increases in mental health visits among non-ADRD spouses that peak around the time of spousal death, reaching three-fold the counterfactual level, while psychiatric medication use increases by approximately 50%. These outcomes improve after the spouse’s death, suggesting relief from sustained exposure rather than a permanent health shock. The authors also document increased mortality risk for the non-ADRD spouse and use Lee bounds to account for the resulting selective attrition, a novel application in this setting.The second paper examines whether paid sick leave (PSL) mandates affect the timing and setting of ADRD diagnoses. Using commercial claims data and the Health and Retirement Study linked to Medicare claims, the authors estimate difference-in-differences and event study models that leverage variation in PSL mandate adoption across states. Preliminary findings suggest that access to PSL is associated with a lower likelihood of reporting difficulty remembering or concentrating, consistent with the hypothesis that PSL expands the capacity for employed adults to engage in preventive and diagnostic care. Ongoing analysis examines whether these patterns translate into earlier outpatient ADRD diagnoses and changes in healthcare spending.The third paper investigates how ADRD affects household composition and the financial well-being of adult children. Using a novel dataset linking more than 20 years of Medicare diagnosis data with credit reporting records for over 300,000 individuals with ADRD and matched controls, the authors document that individuals diagnosed with ADRD who were not previously living with children become more likely to move in with children or enter nursing homes in the months following diagnosis. The authors are examining how these changes in household composition affect financial outcomes for new household members, providing new evidence on the intergenerational economic consequences of dementia.Together, these papers demonstrate that the costs of ADRD extend well beyond the individual, affecting the mental health of spouses, the timing of clinical engagement, and the financial security of the next generation. The findings have direct implications for caregiver support policies, labor policies that facilitate access to care, and financial protections for families affected by dementia.

Policy Area

• Health Policy

Chair

• Kosali Simon, Indiana University

Discussant

• Kosali Simon, Indiana University

Organizer

• Yulya Truskinovsky, Syracuse University

Individual Presentations

• Living with Dementia: Mental Health and Mortality Effects on Spouses - Presenting Author: Yulya Truskinovsky, Syracuse University

• Paid Sick Leave and the Timing of Dementia Diagnosis - Presenting Author: Katherine J Wen, Vanderbilt University

• Cognitive Decline and Changes in Household Composition - Presenting Author: Krista Ruffini, Georgetown University