Our discussion of several topics is limited by the constraints of space and data. In particular, housing choice and mobility, the separate identification of period or cohort effects on the economic status of the aged, and the baby boom's retirement prospects are given less space than their importance might suggest.1 Predicting the economic status of the aged at the turn of the century is, in our opinion, a speculative venture; forecasting the economic status of the aged well into the next century is even worse (Smeeding, 1991; Palmer, 1988). In fact, the data resources needed to make such judgments as these are just now beginning to be collected and analyzed.

This chapter is divided into four substantive parts. The next three sections deal with income (and consumption) and poverty, wealth, and intergenerational economic relations, respectively. In the final section we turn to the implications of our results for additional research and data needs in this area.

ECONOMIC WELL-BEING: INCOME, POVERTY, AND CONSUMPTION

The purpose of this section is to review what we know about the economic circumstances of the old, with economic welfare largely measured by their incomes. Comparisons are made both over time and across countries regarding the poverty and affluence of the aged. In order to present these materials in a comprehensive way, we concentrate on income comparisons that provide the single best widely available measure of economic status at a point in time or over time. Other valid and important measures of economic status, such as consumption, are discussed. Our treatment is, however, more circumscribed because of space and data limitations.

There are a variety of income concepts available to applied researchers, but economists have traditionally relied on disposable personal income as the most important indicator of economic well-being for an individual. Cross-sectional, survey-based money income data are regularly available to researchers. Less readily available, but increasingly useful, are longitudinal "panel" microdata sets that permit researchers to follow individuals and their changing economic circumstances over time. In the United States, the leading examples of the latter are the Michigan Panel Study of Income Dynamics (PSID) and the National Longitudinal Survey (NLS). Data from the Luxembourg Income Study (LIS) project allow for cross-sectional comparisons among several industrial democracies at two points in time (early

1  

For instance, the choice of housing and living arrangements among elderly widows has important interactions with economic circumstances and measured well-being; see Macunovich et al. (1992).



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