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Yamada, Atsuhiro
Casey, Bernard
Year of Publication: 
Series/Report no.: 
LIS Working Paper Series 314
Aging involves not one but several transitions. People move from working to not working, from relying upon labor income to relying on transfers. They also tend to live in smaller households, not only because any children will have moved away but also because, at some stage, a spouse dies. People move homes and sometimes they move back to live with their now grown-up children. This paper examines the wellbeing of people as they pass through the later stages of their life and through different labor market statuses and domestic statuses. It examines and compares nine countries - Canada, Finland, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom and the United States. It draws particularly from a special analysis of micro-data sets that report on incomes, but it complements this with an analysis of data on wealth, on consumption, on housing and on the use of in-kind services provided by the state. The paper is original in more than one way. First, its analysis is based upon the individual rather than the household. This means both that the importance of own-income sources can be evaluated and that intrafamilial transfers are observed. Second, it includes Japan, a country where both employment patterns and living patterns for older people are substantially different to those of many other OECD countries. Many more work, and many more live in multigenerational households. Principal findings are that, although income does fall with age, people over retirement age are not substantially less well off than people of working age. The difference is further reduced when the absence of work-related expenses and older people's generally lower housing expenses are taken into account. Remarkably, and regardless of the public-private mix of pensions and the importance or otherwise of work, the income of retirement-age people, relative to that of working-age people, is rather similar across all nine countries. Nevertheless, some older people, particularly old single women, fare less well, and this is the case in all nine countries. Widowhood reduces wellbeing, particularly because in many countries all or part of the husband's pension is lost, but also because single people do not enjoy the scale economies enjoyed by couple households. Those old single people who move back with their adult relatives tend to fare much better than those who stay living alone. Consumption of in-kind services provided by the state, such as social care and especially of health care services, can substantially enhance the income of the oldest of the old. This needs to be taken into account when relative wellbeing is assessed. The extent to which such services are provided cost-free makes comparisons between countries as different as the United States and Sweden quite fraught. Analysis such as was carried out here on a one-off basis needs to be repeated to monitor changes in wellbeing in old age. This is important because pension policy is being changed. Older people are being encouraged to work longer and private rather than public provision is being promoted.
Document Type: 
Working Paper
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