Association Between Age and Subjective Economic Hardship Across the Income Distribution in Europe

Previous studies have shown that older people are more satisfied with their finances than younger individuals, even when they have a low income. We examine to what extent this can be observed when studying the risk of subjective economic hardship among the adult population in 28 European countries. Our study describes the association between age and the risk of subjective economic hardship and how the association varies by level of income. Additionally, we examine the role of assets and debt in explaining the association. The data come from the 2020 EU-SILC survey and its ad-hoc module on over-indebtedness, consumption, and wealth. We estimate logistic regression models that control for country-level variation. We show that there is substantial variation across Europe regarding how the likelihood of experiencing subjective economic hardship varies by age. The income position of different age groups explains, to a large extent, the different age patterns for hardship across countries. When controlling for country-level variation and level of income, older people are less likely than younger age groups to experience subjective economic hardship. We find indications that older people have a lower risk of subjective economic hardship especially in the lower bottom of the income distribution. Older people’s lower risk seems to be largely explained by their more frequent ability to use savings to maintain their standard of living.