Postsecondary education and the well-being of women in retirement

Abstract

Theoretical and empirical evidence have shown that education, especially postsecondary education, has important effects on women's social and economic status during their preretirement years. Few studies, however, have assessed if women's postsecondary education makes a difference in their economic well-being after they retire. This study examined the relationship between postsecondary education and retirement economic well-being among white and African American women. Using the 1993 Panel Study of Income Dynamics (PSID) data, the authors found that after controlling for demographic characteristics and employment-related variables, both white and African American women with postsecondary education were better off economically and relied less on welfare income during their retirement. The article presents a re-examination of public policies such as the 1996 federal welfare reform legislation that eliminated welfare recipients' opportunity for postsecondary education. Key words: elderly women; postsecondary education; retirement; welfare reform. ********** The poverty rate among elderly women is twice that of elderly men (U.S. Bureau of the Census, 2000). The rates are especially high among single women (including widowed, divorced, separated, or never married women) over 65 (Ozawa, Lum, & Tseng, 1999; U.S. Bureau of the Census, 2000). Economic well-being after retirement is determined largely by lifetime earning patterns and savings. Because men and women tend to follow different pathways through major role domains such as employment and family responsibilities (Bianchi & Spain, 1996; Rossi, 1980), their economic status in later life varies accordingly. Any legislation that affects women's preretirement earnings or employment status automatically alters their economic well-being in their retirement years. When Congress considers new social policies, it is important to understand if and how these policies would change women's social and economic status. There are reasons to be concerned about the consequences of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193) not only on working-age women but also on women in their retirement age. One of the provisions of this legislation is the elimination of opportunities for postsecondary education. Job experience is seen as an adequate and less costly alternative to education for poor women. Poor women with children must start working within 24 months of receiving assistance, and they are allowed a maximum of 12 months of vocational training while on welfare. These requirements have forced poor women to search for quick employment. Many of the women who have found jobs earn minimum wage and continue to live in poverty (Moore & Selkowe, 1999; National Conference of State Legislatures, 1998; Pavetti, 1997; Strawn, 1998). It is likely that their poverty will persist into their retirement years. Most research attempting to explain differences in retirement income has used data that are restricted to men (DeViney, 1995; DeViney & Solomon, 1995; O'Rand, 1990, 1996), and research on economic well-being of women during their retirement years lags far behind that of men. In this article, we address the following questions: How does women's educational attainment affect their economic well-being after retirement? Does education have the same or different patterns of influence on elderly white and African American women? Are women with postsecondary education economically better off during their retirement years compared with those without postsecondary education? We used data from the 1993 Panel Study of Income Dynamics (PSID) to assess the effects of education on elderly women's economic well-being after controlling for demographic and employment-related variables that are known to have an effect on their retirement income. We show that women benefit from postsecondary education not only during their working years but also during their retirement years. …