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Is the Age Gradient in Self-Reported Material Hardship Explained by Resources, Needs, Behaviours or Reporting Bias?

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Abstract

Older people report much less hardship than younger people in a range of contexts, despite lower incomes. Hardship indicators are increasingly influential, so the source of the gradient has considerable policy implications. We propose a theoretical and empirical strategy to decompose the sources of this relationship. We exploit a unique feature of the Household, Income & Labour Dynamics Australia (HILDA) survey, which collects reports of hardship from all adult household members, facilitating within-couple estimates. The majority of the relationship is explained by observed resources, particularly wealth and home ownership. One third of the relationship is explained by unobserved differences between households, which we interpret as age-related behavioural choices. Reporting error does not appear to contribute to the age gradient.

Suggested Citation

  • Siminski, Peter & Yerokhin, Oleg, 2010. "Is the Age Gradient in Self-Reported Material Hardship Explained by Resources, Needs, Behaviours or Reporting Bias?," Economics Working Papers wp10-02, School of Economics, University of Wollongong, NSW, Australia.
    • Handle: RePEc:uow:depec1:wp10-02
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    Cited by:

    1. Bedük, Selçuk, 2018. "Identifying people in poverty: a multidimensional deprivation measure for the EU," SocArXiv 7prxq, Center for Open Science.
    2. Roger Wilkins, 2021. "Economic Wellbeing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 469-481, December.
    3. Botha, Ferdi & Ribar, David C., 2023. "For worse? Financial hardships and intra-household resource allocation among Australian couples," Economic Modelling, Elsevier, vol. 119(C).
    4. Yuvisthi Naidoo, 2019. "A Multi-dimensional Individual Well-Being Framework: With an Application to Older Australians," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 146(3), pages 581-608, December.

    More about this item

    Keywords

    Hardship; age;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D39 - Microeconomics - - Distribution - - - Other

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