Consumption and Age

Using 1990 CEX data, Rose Rubin and Michael Nieswiadomy compared consumption of older households that received cash assistance (food stamps or Supplement Security Income [SSI]) with those that received no cash assistance. The latter group was further subdivided into three income categories: poor (income less than 125 percent of the poverty level), low income (between 125 and 200 percent of the poverty level), and higher income (more than 200 percent of the poverty level). The results suggest that poor and low-income recipients were less well-off than cash assistance recipients. Overall, as income increased, the percentage of the budget spent on food decreased for all income categories. A 1 percent increase in income generated approximately a 1 percent increase in spending on housing for all three income groups. For health care, a 1 percent increase in income generated about a 1 percent increase in spending for the poor, no significant change for the low-income group, and a 0.37 percent increase for those with higher income. Overall, Rubin and Nieswiadomy concluded that poor and low-income older households that did not receive cash assistance were even more financially distressed than those receiving financial assistance: "Their reported current income is substantially lower than their expenditures, so they dissave at unsustainable rates. This annual dissaving, combined with their relatively low levels of financial assets, indicates continuing financial exigency" (Rubin and Nieswiadomy, 1997, pp. 96–97).