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Poverty Among the Elderly: Where are the Holes in the Safety Net?

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  • Michael J. Boskin
  • John B. Shoven

Abstract

Using data from the longitudinal retirement history survey (RHS), we examine the economic status of the cohort of the elderly who were 68 -73 years old by 1979 to see who fell through the safety net in the 1970s. Our most important finding is that a non-trivial fraction of the elderly in the age/vintage group we study either remained poor, became poor, or had very low replacement rates in terms of their total income. This occurred despite the enormous general improvement of the economic status of the elderly, part of which was made possible by very large increases in real Social Security benefits. Examination of the characteristics of those who fell through the safety net reveal that females, especially widows, were the most likely candidates for economic difficulty in this cohort in this stage of their life. We also note a sharp difference in realizations of retirement income expectations among those who were poor and/or had low replacement rates relative to those who were well off and/or had high replacement rates. Both groups received substantially more Social Security benefits than expected, whereas those with (ex post) low replacement rates received less in pensions and continued earnings than they had expected while those with high replacement rates received more than expected.

Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberwo:1923
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    References listed on IDEAS

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    1. 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.
    2. 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.
    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.
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    Cited by:

    1. John P. Rust, 1989. "A Dynamic Programming Model of Retirement Behavior," NBER Chapters,in: The Economics of Aging, pages 359-404 National Bureau of Economic Research, Inc.
    2. Michael J. Boskin & Douglas J. Puffert, 1987. "Social Security and the American Family," NBER Chapters,in: Tax Policy and the Economy, Volume 1, pages 139-159 National Bureau of Economic Research, Inc.

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