Poverty across the Life Cycle: Evidence from the PSID

Abstract

The likelihood of experiencing poverty at some point during the adult life cycle is estimated. These probabilities are derived through a set of life tables built upon 25 waves of data from the Panel Study of Income Dynamics, and represent an alternative approach to studying poverty than prior empirical studies. Life table analyses are divided into early adulthood (ages 20-40), middle adulthood (ages 40-60),and later adulthood (ages 60-80). The findings indicate that individuals within the sample face a significant risk of poverty at some point during their adult lives, particularly during the early and later stages of adulthood. Duration tends to be relatively short (1 or 2 years), but once poverty occurs, it is likely to occur again. Results also reveal the profound life-course effect that race, education, and gender have upon the likelihood of encountering poverty during the adult years. Several policy and research implications are discussed. © 2001 by the Association for Public Policy Analysis and Management.

The dynamics of poverty in the United States: A review of data, methods, and findings

“…Ratcliffe (2002, 2005) find that household heads under 25 years old are significantly more likely to enter poverty in both the PSID and SIPP data. This finding is corroborated by Ribar and Hamrick (2003) and Rank and Hirschl (2001)-the latter reporting that more than one-third of individuals (35.7 percent) experience poverty between the ages of 20 and 40, compared to 22.7 percent experience poverty between the ages of 40 and 60.…”

“…Rank and Hirschl (2001) find that the likelihood of poverty entry generally decreases for a number of years, but begins to increase around age 60. Specifically, they find that 28.8 percent of 60 to 80 year olds experience poverty, compare to 22.7 percent of 40 to 60 year olds.…”

“…It is not clear whether this is due to more complete or accurate reporting of income in the PSID, as some researchers contend (Duncan 1984;Rank and Hirschl 2001;Stevens 1994) or simply measurement error. Bane and Ellwood (1986), Iceland (1997a), and Stevens (1994) multiply the government's poverty thresholds by 1.25 to make their figures comparable to official figures.…”

Children facing economic hardships in the United States

“…The young adulthood years tend to have a higher probability of experiencing poverty. See Rank and Hirschl (2001).…”

Nearly universal, but somewhat distinct: The feminization of poverty in affluent Western democracies, 1969–2000

“…The elderly are disproportionately poor and trends in U.S. poverty are quite different with a relative measure (Betson and Warlick 1998;Brady 2003aBrady , 2004. There are more elderly women than elderly men, and elderly women are more likely to be poor (Bianchi 1999;McLanahan and Kelly 1999;Rank and Hirschl 2001;Stone 1989). As a result, including the elderly may significantly affect estimates of the feminization of poverty.…”