Older Women’s Income and Wealth Packages: The Five-Legged Stool in Cross-National Perspective

In this chapter, we analyze the economic well-being of older women in cross-national perspective, comparing the United States with four other high-income countries: the United Kingdom, Germany, Italy and Sweden. These countries constitute an illuminating group; although all operate at similar levels of economic development, their employment, income, and wealth outcomes vary widely. We report some of the first findings based on micro-data from a new source, the Luxembourg Wealth Study (LWS). LWS, a project within the larger Luxembourg Income Study (LIS), is a database containing harmonized wealth datasets from a number of industrialized countries. Using the LWS data, we analyze the income and wealth packages held by women, age 60 and older, across these five countries. The income and wealth results from the LWS data are supplemented by findings on older adults’ employment patterns, using the longstanding LIS income micro-datasets. Throughout this chapter, we invoke the metaphor of the four-legged stool, which is often used to refer to the multiple income streams on which older persons rely. In this chapter, we conceptualize the income stool as having these four legs: earnings, capital income, private transfers, and public transfers. We extend this metaphor to conceptualize a fifth leg – that is, wealth. We capture wealth mostly as a stock (in what we call wealth packages), although wealth clearly constitutes potential and actual income flows. We also capture some wealth directly as flows, via the capital income component of the income package. We begin by assessing employment, income, and wealth outcomes, first among all older women’s households and, second, in one particularly vulnerable group: older women who live alone. We then turn our attention to poor older women and, finally, to those who are extremely poor. We close with brief comments about policy implications and further research.