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Poverty - Late-life Poverty In The United States And Abroad

age aging social differences percent income economic health

Social Security, as noted above, does incorporate a redistributive element and plays an equalizing role that reduces old-age inequality. However, it lacks, even in combination with related programs such as Supplemental Security Income (SSI), a high minimum benefit and provides less protection for lower-income individuals than do systems in a number of other developed countries. Smeeding, Rainwater, and Torrey (1993) compared levels of late-life inequality and minimum benefits in public pension systems (as a percentage of median income) across a number of countries. The United States provided the lowest minimum benefit (defined by the means-tested SSI level) at 34 percent of median income, and experienced the highest level of late-life inequality. Countries such as France, Canada, and Australia guaranteed benefits close to 50 percent of median income and experienced intermediate levels of late-life inequality, while the Netherlands and Sweden, with their well-developed social welfare systems, provided guarantees of 72 percent and 66 percent of median income, respectively, and experienced the lowest rates of late-life inequality. Countries such as the Netherlands and Sweden with high minimum retirement income guarantees have largely eliminated late-life economic poverty. Of course, these and their other social welfare protections typically have come at the cost of a higher payroll tax and other taxation rates on working-age citizens than have been found politically acceptable in the United States.

While the existing U.S. poverty measure has significant limitations in comparing poverty rates across years or age groups, it is nevertheless a useful indicator of a group among the older population that is clearly experiencing economic privation. Similarly, near-poverty (e.g., those living below 150 percent of the poverty line) is a useful way to define a group that, while not in quite as dire straits, also experiences considerable privation and is an appropriate target for efforts to address unmet needs in the older population. It is therefore helpful to examine the characteristics of the older population living in poverty. Not surprisingly, they are disproportionately female, and living alone, have chronic health conditions, and are over seventy-five years of age. In 1999, 69.7 percent were women. The poverty rate (in 1999) was 26.4 percent among African American women and 5.7 percent among white men. Similarly, among the 7.5 million elderly Americans living below 150 percent of the poverty line, 68.4 percent were women (47.1 percent of African American women fell into this category, and 14.7 percent of men). These differentials reflect lagged effects of differences in early advantages and disadvantages, differences in economic opportunities during the working years, the economic impact of differential rates of disability and ill health across socioeconomic groups in later life, and similar factors. This process of cumulative advantage and disadvantage reflects the fact that despite some redistributional features, retirement income systems in the United States are based heavily on pre-retirement earnings. The circumstances of the substantial population living below 150 percent of poverty (almost one-quarter of the older population) contrast sharply with those of more affluent older adults, representing a continuation of a long-standing "two worlds of aging" pattern in the United States (see Crystal, 1981).

STEPHEN CRYSTAL

BIBLIOGRAPHY

CHULIS, G.; EPPIG, F.; HOGAN, M. O.; WALDO, D.; and ARNETT, R. "Data Watch: Health Insurance and the Elderly." Health Affairs Spring 1993: 111–118.

CITRO, C. F., and MICHAEL, R. T. Measuring Poverty: A New Approach. Washington, D.C.: National Academy Press, 1995.

CRYSTAL, S. America's Old Age Crisis: Public Policy and the Two Worlds of Aging. New York: Basic Books, 1982.

CRYSTAL, S.; HARMAN, J.; SAMBAMOORTHI, U.; JOHNSON, R.; and KUMAR, R. "Out of Pocket Health Care Costs Among Older Americans." Journal of Gerontology: Social Sciences 55B, no. 1 (2000): S51–S62.

CRYSTAL, S., and JOHNSON, R. The Changing Retirement Prospects of American Families: Impact of Labor Market Shifts on Economic Outcomes. Public Policy Institute Publication #98-01. Washington, D.C.: AARP, 1998.

CRYSTAL, S., and SHEA, D. "Cumulative Advantage, Cumulative Disadvantage, and Inequality Among Elderly People." The Gerontologist 30, no. 4 (1990): 437–443.

CRYSTAL, S.; SHEA, D.; and KRISHNASWAMI, S. "Educational Attainment, Occupational History, and Stratification: Determinants of Later-Life Economic Resources." Journal of Gerontology: Social Sciences 47, no. 5 (1992): S213–S221.

CRYSTAL, S., and WAEHRER, K. "Later-Life Economic Inequality in Longitudinal Perspective." Journal of Gerontology: Social Sciences 51B, no. 6 (1996): S307–S318.

JENSEN, L., and MCLAUGHLIN, D. "The Escape from Poverty Among Rural and Urban Elders." The Gerontologist 37 (1997): 462–468.

KAROLY, L., and ROGOWSKI, J. "The Effect of Access to Post-Retirement Health Insurance on the Decision to Retire Early." Industrial and Labor Relations Review 48 (1994): 103–123.

LILLARD, L.; ROGOWSKI, J.; and KINGTON, R. "Long-Term Determinants of Patterns of Health Insurance Coverage in the Medicare Population." The Gerontologist 37 (1997): 314–323.

RANK, M., and HIRSCHL, T. "Estimating the Proportion of Elderly Americans Ever Experiencing Poverty During Their Elderly Years." Journal of Gerontology: Social Sciences 54B, no. 4 (1999): S184–S193.

SHORT, K.; GARNER, T.; JOHNSON, D.; and DOYLE, P. Experimental Poverty Measures: 1990 to 1997. U.S. Census Bureau, Current Population Reports, Consumer Income, P60-205. Washington, D.C.: U.S. Government Printing Office, 1999.

SMEEDING, T.; TORREY, B. B.; and RAINWATER, L. Going to Extremes: An International Perspective on the Economic Status of the U.S. Aged. Working Paper No. 87. Luxembourg: Luxembourg Income Study, 1993.

U.S. Bureau of the Census, Current Population Reports; Series P-60, No. 210, Poverty in the United States: 1999. Washington, D.C.: Bureau of the Census, 2000.

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