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Social Security, Economic Growth, and the Rise in Independence of Elderly Widows in the 20th Century

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  • Kathleen McGarry
  • Robert F. Schoeni

Abstract

The share of elderly widows living alone rose from 18 percent in 1940 to 62 percent in 1990, while the share living with adult children declined from 59 percent to 20 percent. This study analyzes the causes of this change and finds that income growth, in particular increased Social Security benefits, was the single most important factor causing the change in living arrangements accounting for nearly two-thirds of the rise in the share of elderly widows living alone. Changes in benefits from the mean-tested OAA/SSI programs had a lesser impact on the decision to live alone but were a significant factor in explaining changes in the living arrangements of the poorest widows. Furthermore, contrary to recent work, we find no evidence that the effect of income on living arrangements became stronger over the period; income had a substantial positive effect on the propensity to live alone as early as the 1940s and 1950s. Finally, the substantial changes observed in the composition of the population with respect to age, race, immigrant status, schooling, and completed fertility explain a relatively small share of the changes in living arrangements.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6511.

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Date of creation: Apr 1998
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Publication status: published as Demography (2000), forthcoming.
Handle: RePEc:nbr:nberwo:6511
Note: AG
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Find related papers by JEL classification:

  • J1 - Labor and Demographic Economics - - Demographic Economics
  • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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  1. Schoeni, R-F, 1996. "Does Aid to Families with Dependent Children Displace Familial Assistance?," Papers 96-12, RAND - Labor and Population Program.
  2. Lampman, Robert J & Smeeding, Timothy M, 1983. "Interfamily Transfers as Alternatives to Government Transfers to Persons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 29(1), pages 45-66, March.
  3. Burkhauser, Richard V & Turner, John A, 1978. "A Time-Series Analysis on Social Security and Its Effect on the Market Work of Men at Younger Ages," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 701-15, August.
  4. Cox, Donald & Jakubson, George, 1995. "The connection between public transfers and private interfamily transfers," Journal of Public Economics, Elsevier, vol. 57(1), pages 129-167, May.
  5. Douglas Wolf & Beth Soldo, 1988. "Household composition choices of older unmarried women," Demography, Springer;Population Association of America (PAA), vol. 25(3), pages 387-403, August.
  6. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-40, September.
  7. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
  8. Costa, Dora L, 1997. "Displacing the Family: Union Army Pensions and Elderly Living Arrangements," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1269-92, December.
  9. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  10. Burkhauser, Richard V & Turner, John A, 1982. "Social Security, Preretirement Labor Supply, and Saving: A Confirmation and a Critique," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 643-46, June.
  11. Costa, Dora L., 1999. "A house of her own: old age assistance and the living arrangements of older nonmarried women," Journal of Public Economics, Elsevier, vol. 72(1), pages 39-59, April.
  12. Jan Mutchier & Jeffrey Burr, 1991. "A longitudinal analysis of household and nonhousehold living arrangements in later life," Demography, Springer;Population Association of America (PAA), vol. 28(3), pages 375-390, August.
  13. Quadagno, Jill, 1988. "The Transformation of Old Age Security," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226699233, February.
  14. Robert Hutchens & George Jakubson & Saul Schwartz, 1989. "AFDC and the Formation of Subfamilies," Journal of Human Resources, University of Wisconsin Press, vol. 24(4), pages 599-628.
  15. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
  16. Robert Moffitt & Robert Reville & Anne Winkler, 1998. "Beyond single mothers: Cohabitation and marriage in the AFDC program," Demography, Springer;Population Association of America (PAA), vol. 35(3), pages 259-278, August.
  17. John Beresford & Alice Rivlin, 1966. "Privacy, poverty, and old age," Demography, Springer;Population Association of America (PAA), vol. 3(1), pages 247-258, March.
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Cited by:

  1. Naoko Shinkai, 2000. "How Do Social Security and Income Affect the Living Arrangements of the Elderly? Evidence from Reforms in Mexico and Uruguay," Research Department Publications 4231, Inter-American Development Bank, Research Department.
  2. Naoko Shinkai, 2000. "¿De qué manera la seguridad social y el ingreso repercuten en los arreglos de vida de los ancianos? Elementos de juicio de las reformas de México y Uruguay," Research Department Publications 4232, Inter-American Development Bank, Research Department.
  3. Sarmistha Pal, 2006. "Elderly Health, Wealth and Co-residence with Adult Children in Rural India," CEDI Discussion Paper Series 06-09, Centre for Economic Development and Institutions(CEDI), Brunel University.
  4. Florian Heiss & Michael Hurd & Axel Borsch-Supan, 2003. "Healthy, Wealthy, and Knowing Where to Live: Predicted Trajectories of Health, Wealth and Living Arrangements Among the Oldest Old," NBER Working Papers 9897, National Bureau of Economic Research, Inc.
  5. Eric Edmonds & Kristin Mammen & Douglas L. Miller, 2004. "Rearranging the Family? Income Support and Elderly Living Arrangements in a Low Income Country," NBER Working Papers 10306, National Bureau of Economic Research, Inc.
  6. David N. Weil, 2006. "Population Aging," NBER Working Papers 12147, National Bureau of Economic Research, Inc.
  7. Dora L. Costa, 2008. "The Rise of Retirement Among African Americans: Wealth and Social Security Effects," NBER Working Papers 14462, National Bureau of Economic Research, Inc.
  8. Namkee Ahn, . "Economic Consequences of Widowhood in Europe: Cross-country and Gender Differences," Working Papers 2004-27, FEDEA.
  9. Eleni Karagiannaki, 2011. "Changes in the Living Arrangements of Elderly People in Greece: 1974–1999," Population Research and Policy Review, Springer, vol. 30(2), pages 263-285, April.

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