Missing poor in the U.S

Mathieu Lefebvre, Pierre Pestieau and Gregory Ponthiere

No 2019005, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Given that poor individuals face worse survival conditions than non-poor individuals, one can expect that a steeper income/mortality gradient leads, through stronger income-based selection, to a lower poverty rate at the old age (i.e. the “missing poor” hypothesis). This paper uses U.S. state-level data on poverty at age 65+ and life expectancy by income levels to provide an empirical test of the missing poor hypothesis. Using air pollution as an instrument for mortality differentials, we show that instrument changes in mortality differentials have a negative and statistically significant effect on old-age proverty: A 1 % increase in the mortality differential implies a 9 % decrease in the 65+ headcount poverty rate. Using those regression results, we compute hypothetical old-age poverty rates while neutralizing the impact of the income/mortality gradient, and show that correcting for heterogeneity in income-based selection effects modifies the comparison of old-age poverty prevalence across states.

Keywords: poverty; measurement; income/mortality gradient; selection biases; comparability (search for similar items in EconPapers)
JEL-codes: I32 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-age and nep-dem
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https://sites.uclouvain.be/core/publications/coredp/coredp2019.html (application/pdf)

Related works:
Journal Article: Missing Poor in the U.S (2024)
Working Paper: Missing Poor in the U.S (2024)
Working Paper: Missing Poor in the U.S (2024)
Working Paper: Missing Poor in the U.S (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2019005

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