Trends in the Economic Status of the Aged and the Implications for State Policy

This paper examines recent trends in the economic status of the elderly. Particular attention is given to shifts in the income composition of older households and why these shifts have taken place. It is shown that most of these shifts are attributable, either directly or indirectly, to Social Security and private pension policies. The data also reveal that the income mix of poor older households differs greatly from that of more affluent older households. This has implications for the formulation of policies to improve the economic status of the elderly in poverty. Unfortunately, the current policy environment, characterized by large federal deficits, places severe constraints on developing federal programs to aid poor older persons. Thus, it is likely that state governments will need to take increasing responsibility for programs targeted to the aged poor. The paper concludes by considering the potential effectiveness of such programs.