Intra-household transfers and old-age security in America, 1890-1950

This paper explores the economic status of the elderly in late nineteenth and early twentieth century America. It has been widely believed that reduced earnings of ageing workers in these periods were fully supplemented by increased earnings of children. The patterns of individual consumption expenditures, however, indicate that children's supports were no longer an important means of old-age security after the end of the nineteenth century. Older males who were out of the labour force were much poorer than active workers of a similar age. The retired were not as much protected by family support as active workers. This result indicates that the previous studies based mainly on active workers overstate the extent of economic progress of the entire elderly population in the industrial era. This study tends to support the conventional belief that the rise of the welfare state was a response to the emerging social problems in the era of industrialization such as unemployment, poverty, and dependence of the elderly.