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Net Government Expenditures and the Economic Well-Being of the Elderly in the United States, 1989-2001

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  • Edward N. Wolff
  • Ajit Zacharias
  • Hyunsub Kum

Abstract

We examine the economic well-being of the elderly, using the Levy Institute Measure of Economic Well-Being (LIMEW). Compared to the conventional measures of income, the LIMEW is a comprehensive measure that incorporates broader definitions of income from wealth, government expenditures, and taxes. It also includes the value of household production. We find that the elderly are much better off, relative to the nonelderly, according to our broader measure of economic well-being than by conventional income measures. The main reason for the higher relative LIMEW of the elderly is the much higher values of income from wealth and net government expenditures for the elderly than the nonelderly. There are pronounced differences in well-being among the population subgroups within the elderly. The older elderly are worse off than the younger elderly, nonwhites are worse off than whites, and singles are worse off than married couples. We also find that the degree of inequality in the LIMEW is substantially higher among the elderly than among the nonelderly. In contrast, inequality in the most comprehensive measure of income published by the Census Bureau is virtually identical among the elderly and nonelderly. The main factor behind the degree of inequality, as the decomposition analysis reveals, is the greater size and concentration of income from nonhome wealth in the LIMEW compared to extended income (EI).

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  • Edward N. Wolff & Ajit Zacharias & Hyunsub Kum, 2006. "Net Government Expenditures and the Economic Well-Being of the Elderly in the United States, 1989-2001," Economics Working Paper Archive wp_466, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_466
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    References listed on IDEAS

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    1. Michael S. Rendall & Alden Speare, 1993. "Comparing Economic Well‐Being Among Elderly Americans," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(1), pages 1-21, March.
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    3. J. Steven Landefeld & Stephanie H. McCulla, 2000. "Accounting For Nonmarket Household Production Within A National Accounts Framework," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 289-307, September.
    4. repec:bla:revinw:v:27:y:1981:i:2:p:137-64 is not listed on IDEAS
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