The economic well-being of retired households

Young-Ae Sung, Purdue University

Abstract

With an increasing proportion of retired households, economic well-being during retirement is an important concern of both current and future retirees. It is also an important issue for policy makers, educators and researchers. The purpose of this study was to examine the economic well-being of households whose head was retired in 1989, utilizing the combined income and net worth measure of economic well-being which was adjusted for household size and composition. The first objective was to examine the economic well-being of retired households relative to the average economic well-being of total households and to those of nonretired households. The second objective of the study was to examine the distribution of economic well-being among retired households and to identify factors which influence the economic well-being during retirement. The effects of demographic factors, the human capital factor and longest job-related factors and the interrelationships among these factors were examined. The data came from the 1989 Survey of Consumer Finances. For the first objective, mean and the t test were utilized. For the second objective, percentage distribution, Gini ratio and path analysis were employed. The findings of relative economic well-being of retired households to average and nonretired households showed that the economic well-being of retired households was 87 percent of the average economic well-being of total households. The economic well-being of retired households, whose head was out of labor force and 55 years old or more, was higher than that of older working households, lower than that of younger unemployed households, and statistically the same as that of younger working households. The results of the path analysis showed that race, sex and age had significant direct and/or indirect effects on economic well-being of retired households. Education and income of longest job were significant intervening variables, whereas the duration of longest job was not. On the basis of the results, implications for public policy and future research were discussed.

Degree

Ph.D.

Advisors

Widdows, Purdue University.

Subject Area

Economics|Families & family life|Personal relationships|Sociology|Welfare|Gerontology

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