Abstract
AbstractUsing the largest household panel surveyUnderstanding Society, this paper investigates low-income dynamics among pensioner households in the UK controlling for biases due to initial conditions and non-random survey attrition. Estimation results indicate there is a correlation between initial and conditional poverty status, specifically, there is regression towards the mean. The results find no evidence of a correlation between initial poverty status, conditional poverty status and survey attrition. The findings show the importance of benefit income in determining poverty status, suggesting that a dichotomous measure such as poverty status may not suitably reflect actual pensioner living standards. Aside from benefit income, receipt of employer and occupational pension, health, education and subjective financial situation are important in determining initial and conditional poverty status. Stylised examples highlight the significant differences in the ‘poverty experience’ which arise due to differences individual and household characteristics.
Highlights
In the UK a significant proportion of the population (1 in 6) is aged 65 and over, in addition both birth and cohort life expectancy is increasing (ONS, 2014, 2015).1 These issues are not unique to the UK, but shared by many developed economies and have led to the number of older individuals to rise significantly over the past 50 years (OECD, 2011)
Using the largest household panel survey Understanding Society, this paper investigates lowincome dynamics among pensioner households in the UK controlling for biases due to initial conditions and non-random survey attrition
Using the largest country-specific household panel survey Understanding Society this paper provides the first estimates of low-income dynamics among British pensioner households, which account for biases which may arise due to initial conditions and non-random attrition
Summary
In the UK a significant proportion of the population (1 in 6) is aged 65 and over, in addition both birth and cohort life expectancy is increasing (ONS, 2014, 2015). These issues are not unique to the UK, but shared by many developed economies and have led to the number of older individuals (globally) to rise significantly over the past 50 years (OECD, 2011). Understanding pensioner poverty and pensioner living standards within the context of an ageing population in the UK is an important policy issue; it has implications for advanced economies with a similar welfare system. Using the largest country-specific household panel survey Understanding Society this paper provides the first estimates of low-income dynamics among British pensioner households, which account for biases which may arise due to initial conditions and non-random attrition. The fact that social benefit income, in particular disability income, plays an important role in determining poverty transitions highlights the fact that unlike in conventional studies of poverty dynamics of the working age population, a simple dichotomous measure such as being poor or non-poor may not necessarily truly reflect a pensioners actual standard of living..
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