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Both the proportion of bankruptcy filings that are by the elderly and the proportion of foreclosure starts that affect the elderly have increased dramatically over the past twenty years—suggesting an increase in financial distress of the elderly relative to younger age groups. In this paper, we use new data to examine whether these trends can be explained by either of two events: the 2005 bankruptcy reform and the 2008 financial crisis. Our results show that while these events made both the elderly and younger age groups worse off, they do explain the increase in relative financial distress of the elderly.
Older adults, financial distress, foreclosure, bankruptcy, retirement
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The views expressed in this paper are the authors’ and do not represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. © 2019 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.
Date Posted: 25 September 2019