Poverty Dynamics in Old Age from a Cross-National Comparative Perspective

Background and Purpose: Poverty rates offer insights into a country's poverty level but lack details on mobility in and out of poverty, duration of poverty, and its severity. One can expect different policy responses to poverty depending on the length of time or severity of hardship an individual suffers. Understanding the dynamic nature of old-age poverty is crucial for effective policy. This study expands on previous research by comparing old-age poverty longitudinally across Sweden, Germany, South Korea, and the United States. These countries represent diverse welfare state models. The study focuses on poverty dynamics (duration, transitions, depth) and characteristics of the poor. While much research has concentrated on Western developed nations, little is known about changes in poverty among older adults in developing or newly developed countries. This study aims to fill that gap by examining cross-national differences in poverty dynamics and their relationship with institutional settings.

Methods: Following Esping-Andersen’s (1990) categorization of three typologies of welfare regimes and its modification by Aspalter (2006), four countries were categorized based on welfare regimes: Sweden (social democratic), Germany (corporatist democratic), the US(liberal), and Korea (Confucian/conservative). We used longitudinal data sources for our study: the Health and Retirement Study (HRS) for the US, the Survey of Health, Ageing, and Retirement in Europe (SHARE) for Sweden and Germany, and the Korean Longitudinal Study of Aging (KLoSA) for South Korea, covering the period from 2006 to 2020. Our samples consisted of respondents aged 60 and older who participated in at least half of the observation period from 2006 to 2020. Bivariate tests were conducted to analyze the characteristics of individuals within each poverty subgroup.

Results: We compared poverty dynamics across four countries, considering the length, transitions, and depth of poverty experiences. The poverty rate, averaged over time, masked turnover and varied durations of poverty. Notable patterns emerged: (1) Persistent poverty is low in Germany and Sweden but higher in the US and Korea; (2) Germany and Sweden have more individuals experiencing poverty at least once, contrasting with the US and Korea; and (3) Duration of poverty episodes is shorter in Germany and Sweden than in the US and Korea, revealing nuanced poverty experiences. Bivariate test results provided insights into the demographic and socioeconomic characteristics of individuals experiencing poverty across different countries.

Conclusion and Implications: This study sheds light on diverse demographic and socioeconomic aspects of poverty across different welfare regimes. Policy implications are necessary for (1) addressing the higher proportion of female household heads among the poor in South Korea and the United States; (2) recognizing the impact of marital and work status on poverty; (3) tackling urban poverty challenges in Germany and Sweden alongside rural poverty issues in South Korea and the United States; (4) integrating health interventions into poverty alleviation efforts; and (5) tailoring poverty alleviation programs for older working-age and retirement-age individuals based on their distinct needs and challenges.