How Well Off Are America’s Elderly?
A New Perspective
Given the aging of the American population and the widening gap between rich and poor—not to mention the controversy surrounding the future viability of Social Security—the economic welfare of the elderly is an extremely topical issue. This report provides a new look at America’s elderly, and shows that the official measures drastically understate their level of economic well-being.
The conventional measures of well-being do not adequately reflect income from wealth and net government expenditures. Moreover, in the period from 1989 to 2001, there was an extraordinary increase in income from nonhome wealth, as well as a widening gap in net government expenditures between the elderly and nonelderly. Thus, on the basis of the Levy Institute Measure of Economic Well-Being, which is a more comprehensive measure of income, the economic disadvantage of the elderly relative to the nonelderly appears to be less severe. Nevertheless, inequality has continued to widen within both groups.
The results suggest that government policies and programs that favor the elderly over the nonelderly are misdirected. Rather than cutting back on these programs or redirecting policy, however, the authors advocate the extension of similar programs to the nonelderly, such as universal health care, as well as more generous provisions for the nonelderly in existing social welfare programs.