Missing Poor in the U.S

Mathieu Lefebvre, Pierre Pestieau and Gregory Ponthiere
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Pierre Pestieau: HEC Liège, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: Given that poor individuals face worse survival conditions than non-poor individuals, one can expect that a steeper income gradient in mortality 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 average temperature as an instrument for mortality differentials, we show that instrumented changes in mortality differentials have a negative and statistically significant effect on old-age poverty: a 1 % increase in the mortality differential implies a 16 % 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 gradient in mortality, 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 gradient in mortality; Selection biases; Comparability (search for similar items in EconPapers)
Date: 2024-04
Note: View the original document on HAL open archive server: https://hal.science/hal-04676545v1
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Published in Journal of Economic Inequality, 2024, ⟨10.1007/s10888-024-09625-w⟩

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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 (2019)
Working Paper: Missing Poor in the U.S (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:hal-04676545

DOI: 10.1007/s10888-024-09625-w

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