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Tracking the majority: households, older workers, and retirement during the Great Depression
1School of Business Administration, University of Mississippi, USA. moen@bus.olemiss.edu
Objectives:
Well into the 20th century, elderly people relied on traditional means of support, such as children's financial contributions or continued labor force activity. After the institution of Social Security in the late 1930s, retirement--permanent withdrawal from the labor force with financial arrangements made for support--became an expected part of the life cycle of men 65 years and older in the United States. This research explores the extent of retirement and methods to finance it in the period just before Social Security became available.
Methods:
The 1935-1936 Study of Consumer Purchases (SCP) contains information on demographic and economic conditions for 5,975 households. The SCP is a rich but underutilized source of data on household behavior. The data allow two definitions of labor force activity to be constructed; descriptive statistics identify factors associated with retirement.
Results:
Alternative sources of support, such as pensions and investment income, have been thought to be relatively insignificant before the 1940s. This article shows that retirement in the modern sense appeared before state provision of support for aged persons. SCP data indicate considerable reliance on such financial instruments, a particularly noteworthy result given Depression conditions. Pension and investment income also helps identify persons who might report a gainful occupation but appear to have withdrawn from labor force activity, meeting a modern definition of retirement.
Discussion:
The SCP, collected just as Social Security was enacted, reveals that nonfamilial sources of income like pensions and investments had begun to underwrite retirement without dependence on family members. Many older persons relied on these instruments for support in old age, and many did not have children present in their households. These results constitute evidence for an independent, nonfamily-based retirement before governmental provision of assistance through Social Security.