Is the Age Gradient in Self-Reported Material Hardship Explained by Resources, Needs, Behaviours or Reporting Bias?
AbstractOlder people report much less hardship than younger people in a range of contexts, despite lower incomes. Hardship indicators are increasingly influential, so the source of the gradient has considerable policy implications. We propose a theoretical and empirical strategy to decompose the sources of this relationship. We exploit a unique feature of the Household, Income & Labour Dynamics Australia (HILDA) survey, which collects reports of hardship from all adult household members, facilitating within-couple estimates. The majority of the relationship is explained by observed resources, particularly wealth and home ownership. One third of the relationship is explained by unobserved differences between households, which we interpret as age-related behavioural choices. Reporting error does not appear to contribute to the age gradient.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp10-02.
Length: 37 pages
Date of creation: 2010
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
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Other versions of this item:
- Peter Siminski & Oleg Yerokhin, 2012. "Is the Age Gradient in Self-Reported Material Hardship Explained By Resources, Needs, Behaviors, or Reporting Bias?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(4), pages 715-741, December.
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D39 - Microeconomics - - Distribution - - - Other
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