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Aggregating poor and near-poor elderly under different resource definitions
1Department of Consumer Economics and Housing, Cornell University, Ithaca, NY 14853-4401, USA. msr5@cornell.edu
Summary
Most elderly Americans experience low-intensity poverty, not deep poverty. Accounting for assets and non-cash transfers reveals a high prevalence of poverty with low intensity among older adults.
Area of Science:
- Gerontology
- Economics
- Social Policy
Background:
- The United States has a significant population of near-poor elderly individuals, suggesting a high-prevalence, low-intensity poverty model.
- Traditional poverty measures based solely on cash income may not fully capture the economic resources of the elderly.
Purpose of the Study:
- To recharacterize elderly poverty by including assets and non-cash transfers in resource assessments.
- To analyze the prevalence and intensity of poverty among the elderly using a comprehensive resource definition.
Main Methods:
- Utilized the Foster, Greer, Thorbecke (FGT) poverty index to measure poverty prevalence and intensity.
- Employed data from the 1984 Survey of Income and Program Participation (SIPP).
- Incorporated the annuity value of assets and non-cash transfers into the calculation of available resources.
Main Results:
- Including the value of assets significantly reduced the number of poor and near-poor elderly individuals.
- Adding non-cash transfers shifted many elderly individuals from poverty to near-poverty status.
- The combined effect of assets and non-cash transfers confirmed a high-prevalence, low-intensity poverty profile for the elderly.
Conclusions:
- Defining resources solely by cash income underestimates the total poverty reduction effects.
- Focusing only on poverty prevalence overlooks significant reductions in poverty intensity.
- A comprehensive view of resources, including assets and non-cash transfers, is crucial for accurately assessing elderly poverty.