Document Type
Working Paper
Date of this Version
4-2022
Abstract
The objective of this paper is to determine Americans’ mobility patterns into and out of poverty in their later years. We track how older adults enter into and exit from poverty using the most extensive longitudinal survey on older Americans currently available, the Health and Retirement Study (HRS). Using over 20 years of data from the HRS, we show that the conditional probability of escaping poverty diminishes as the number of years in poverty rise. In particular, older adults’ chances of exiting poverty fall sharply as their time in poverty lengthens, especially between four and eight years. Having been in poverty that long, the chances of exiting poverty then levels out. These results imply that poverty among the US elderly can be quite a persistent state for many older adults although individuals that escape poverty are often able to have income above the poverty line in future years.
Keywords
Financial resilience, poverty dynamics, aging
JEL Code
G53, D14, I38
Working Paper Number
WP2022-11
Disclosure
This research was performed pursuant to a grant from the Institute of Consumer Money Management.
Copyright/Permission Statement
Any opinions and conclusions expressed herein are solely those of the authors and do not represent the opinions or policy any institutions with which the authors are affiliated. ©2022 Clark, Lusardi, and Mitchell. All rights reserved.
Acknowledgements
The authors also acknowledge support from the Pension Research Council/Boettner Center at the Wharton School of the University of Pennsylvania. The authors thank Patrick Royal and Yong Yu for capable research assistance.
Date Posted: 12 April 2022