Movements In and Out of Poverty at Older Ages: Evidence from the HRS

The objective of this paper is to determine Americans’ mobility patterns into and out of poverty in their later years. We track how older adults enter into and exit from poverty using the most extensive longitudinal survey on older Americans currently available, the Health and Retirement Study (HRS). Using over 20 years of data from the HRS, we show that the conditional probability of escaping poverty diminishes as the number of years in poverty rise. In particular, older adults’ chances of exiting poverty fall sharply as their time in poverty lengthens, especially between four and eight years. Having been in poverty that long, the chances of exiting poverty then levels out. These results imply that poverty among the US elderly can be quite a persistent state for many older adults although individuals that escape poverty are often able to have income above the poverty line in future years.