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The Economic Status of the Elderly

In: Financial Aspects of the United States Pension System

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  • Michael D. Hurd
  • John B. Shoven

Abstract

In the first part of the paper using official data sources, we estimate the real income of the elderly and of the rest of the population during the 1570s. We find that income per household of the elderly has increased more rapidly than income per household of the rest of the population, even though the elderly's fraction of income from work decreased greatly. In the rest of the paper we use the 1969 and 1975 Retirement History Surveys to estimate income, wealth and inflation vulnerability of households whose heads were ages 58 through 63 in 1969. The income data verified the results from the official data. The 1969 wealth data show that a representative person on the eve of retirement has small holdings of financial assets: most of the assets are in housing, Social Security and Medicare. Between 1969 and 1975 real wealth increased slightly on average. There was some tendency for the distribution to tighten. We found that contrary to popular opinion, on average the elderly are not especially vulnerable to a sudden increase in either prices or the rate of inflation. Most of their assets are inflation protected. The wealthy are most vulnerable to inflation.
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Suggested Citation

  • Michael D. Hurd & John B. Shoven, 1983. "The Economic Status of the Elderly," NBER Chapters, in: Financial Aspects of the United States Pension System, pages 359-398, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:6038
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    References listed on IDEAS

    as
    1. Benjamin A. Okner, 1975. "Individual Taxes and the Distribution of Income," NBER Chapters, in: The Personal Distribution of Income and Wealth, pages 45-74, National Bureau of Economic Research, Inc.
    2. James D. Smith, 1975. "The Personal Distribution of Income and Wealth," NBER Books, National Bureau of Economic Research, Inc, number smit75-1.
    3. Michael J. Boskin & Michael D. Hurd, 1982. "Are Inflation Rates Different for the Elderly?," NBER Working Papers 0943, National Bureau of Economic Research, Inc.
    4. Clark, Robert L & Kreps, Juanita & Spengler, Joseph J, 1978. "Economics of Aging: A Survey," Journal of Economic Literature, American Economic Association, vol. 16(3), pages 919-962, September.
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    Citations

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    Cited by:

    1. Michael D. Hurd, 1989. "The Poverty of Widows: Future Prospects," NBER Chapters, in: The Economics of Aging, pages 201-230, National Bureau of Economic Research, Inc.
    2. Steven F. Venti & David A. Wise, 1990. "Have IRAs Increased U. S. Saving?: Evidence from Consumer Expenditure Surveys," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 661-698.
    3. Hamermesh, Daniel S, 1984. "Consumption during Retirement: The Missing Link in the Life Cycle," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 1-7, February.
    4. Michael D. Hurd, 1989. "Issues and Results from Research on the Elderly I: Economic Status (Part I of III Parts)," NBER Working Papers 3018, National Bureau of Economic Research, Inc.
    5. Michael J. Boskin & John B. Shoven, 1984. "Concepts and Measures of Earnings Replacement During Retirement," NBER Working Papers 1360, National Bureau of Economic Research, Inc.
    6. Kathleen M. McGarry & Andrew Davenport, 1998. "Pensions and the Distribution of Wealth," NBER Chapters, in: Frontiers in the Economics of Aging, pages 463-486, National Bureau of Economic Research, Inc.
    7. Lawrence H. Summers, 1983. "Observations on the Indexation of Old Age Pensions," NBER Chapters, in: Financial Aspects of the United States Pension System, pages 231-258, National Bureau of Economic Research, Inc.
    8. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-1180, September.
    9. Michael D. Hurd & David A. Wise, 1989. "The Wealth and Poverty of Widows: Assets Before and After the Husband's Death," NBER Chapters, in: The Economics of Aging, pages 177-200, National Bureau of Economic Research, Inc.
    10. Michael J. Boskin & John B. Shoven, 1986. "Poverty Among the Elderly: Where are the Holes in the Safety Net?," NBER Working Papers 1923, National Bureau of Economic Research, Inc.
    11. David T. Ellwood, 1985. "Pensions and the Labor Market: A Starting Point (The Mouse Can Roar)," NBER Chapters, in: Pensions, Labor, and Individual Choice, pages 19-54, National Bureau of Economic Research, Inc.
    12. Steven F. Venti & David A. Wise, 1989. "Aging, Moving, and Housing Wealth," NBER Chapters, in: The Economics of Aging, pages 9-54, National Bureau of Economic Research, Inc.
    13. Robert A. Moffitt, 1984. "Trends in Social Security Wealth by Cohort," NBER Chapters, in: Economic Transfers in the United States, pages 327-358, National Bureau of Economic Research, Inc.
    14. Naohiro Yashiro, 2001. "Policy implications of demographic change: panel discussion: social implications of demographic change in Japan," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 46, pages 297-304.
    15. Michael D. Hurd, 1987. "The Marginal Value of Social Security," NBER Working Papers 2411, National Bureau of Economic Research, Inc.

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