Examining Racial-Ethnic and Gender Disparities in Poverty Among the Elderly Using a Longitudinal Approach

Background and Purpose: Over the last decade, absolute poverty among the overall population in the U.S. has climbed steadily from 12.1% in 2002 to 15.0% in 2011 according to Current Population Survey estimates.  Meanwhile, absolute poverty among those 65 years and over has fallen from 10.4% to 8.7% in the same time span.  Part of the illusion of improving economic circumstances among the elderly stems from the public dissemination of statistics that rely on repeated cross-sections of poverty data.  As such, this study draws a sample of individuals 65 years and over from the 2002 through the 2010 waves of the Health and Retirement Study, and tracks their income trajectories over a ten-year observation window to examine the risk of falling into poverty upon retirement and the extent to which these patterns of risk vary along racial-ethnic and gender lines.  It is well-established that cross-sectional data such as that provided by the Current Population Survey can accurately describe the percentage of individuals that are in the midst of a poverty spell, but they do not reveal the risk of falling into poverty as individuals grow older.  Accordingly, prior longitudinal research examining transitions to poverty among the elderly reveals that single individuals, i.e., widows, and couples display quite different patterns as it is the initial transition from work to retirement that presents the greatest risk of becoming poor for couples while the risk of becoming poor is approximately constant over time for widows.  This study extends prior work by examining the changing patterns of risk among different racial-ethnic and gender groups.

Methods: This research uses data from the Rand version of the Health and Retirement Study to estimate life tables that describe the risk of falling into poverty upon retirement using a two-step process.  The study first draws individuals 65 years and over from Waves 6 (2002), 7 (2004), 8 (2006), 9 (2008), and 10 (2010) and follows their initial transition to retirement.  The study then tracks the income trajectories of those who make this transition to investigate whether and to what extent the risk of falling into poverty varies across time and across different racial-ethnic and gender groups.       

Results: Life table analysis reveals a cumulative, sample poverty rate of 22.2% among elderly individuals over the ten-year observation window, and also finds that the risk of poverty is higher among Hispanic elderly individuals than for Black elderly individuals.  The risk of poverty is especially high among Hispanic females as 53.29% fall into poverty over a ten-year span.  The findings also reveal that the risk of falling into poverty generally increases over time with the exception of Black males and Hispanic males.   

Conclusions and Implications: While poverty among elderly individuals appears to have diminished over the past decade, the results of this longitudinal study indicate that the true extent of poverty especially among particular racial-ethnic and gender groups is understated.  Hence, policy advocates should exercise caution in interpreting the annual poverty estimates to gauge any level of progress in combating poverty.