Journals of Gerontology Series B: Psychological Sciences and Social Sciences, Vol 54, Issue 5 S279-S290, Copyright © 1999 by The Gerontological Society of America
How older people in the United States and Germany fared in the growth years of the 1980s: a cross-sectional versus a longitudinal view
RV Burkhauser, AC Cutts and DR Lillard
Department of Policy Analysis and Management, Cornell University, Ithaca, New York, USA. rvb1@cornell.edu
OBJECTIVES: The goal of the study was to show that cross-sectional and
longitudinal data yield dramatically different answers to a basic question:
"How did older persons fare in the recovery years of the 1980s?" METHODS:
The United States Panel Study of Income Dynamics and the German
Socio-Economic Panel are used cross-sectionally to capture changes in the
economic well-being of older persons in the trough and peak years of the
1980s business cycle, and longitudinally to trace how the economic
well-being of a given cohort of older persons changed over those years.
Kernel density estimation is then used to show how the distribution of
economic well-being of these populations changed over these years. RESULTS:
Cross-sectional comparisons confirm that persons aged 65 and over in the
peak year were better off than persons aged 65 and over in the trough year
in both countries. Longitudinal comparisons, however, show that persons
aged 65 and over in the trough year who survived to the peak year received
a substantially smaller share of the rewards of economic recovery than
cross-sectional comparisons imply. Moreover, the entire income distribution
of older persons in the United States shifted downwards. DISCUSSION:
Compositional changes in the cross-sectional data, caused by the entry of
high-income persons who are young in the peak year but old in the trough
year, obscure the decline in the economic well-being of the cohort of older
persons who survived the trough year, in cross- sectional comparisons of
older populations in the United States in the 1980s.
