Rags or Riches? Estimating the Probabilities of Poverty and Affluence across the Adult American Life Span

Abstract

Objective. Poverty and affluence represent events central to the American identity of failure and success. Yet in spite of their significance, we know little about the actual likelihood of experiencing these events across the adult life course. In this article we empirically estimate the extent to which Americans will experience poverty and/or affluence during their adulthood. Methods. A series of life tables are constructed based upon data from 25 waves of the Panel Study of Income Dynamics. Our measure of poverty is identical to that used by the U.S. Census Bureau in estimating the overall U.S. poverty rates. Affluence is defined as 10 times the poverty level. Results. Results indicate that between the ages of 25 and 75, 51.1 percent of Americans will experience at least one year below the poverty line, 51.0 percent will encounter a year of affluence, while only 20.1 percent of Americans will avoid either of these economic extremes. The effects of race and education in altering the likelihood of encountering poverty versus affluence are substantial. Conclusions. The opportunities for acute economic failure and success appear to be very real components of the American experience. Based upon this, we discuss an alternative typology to conceptualizing stratification in America.

Homeownership Across the American Life Course: Estimating the Racial Divide

“…After an individual has experienced the event, he/she is removed from the life We would argue that the ages of 25-55 represent the age range where the vast majority of individuals are most likely to become homeowners. These ages encompass the peak years of child rearing (U.S. Census Bureau 2010b), as well as the period when family income tends to be most affluent (Rank and Hirschl 2001). Because homeownership is a positive function of income level, and because married couples with children have a high probability of owning versus renting (Carliner 1974), this age range is when Americans are most likely to become homeowners, and therefore the period of the life course of greatest interest to our study.…”

The dynamics of income and neighborhood context for population health: Do long-term measures of socioeconomic status explain more of the black/white health disparity than single-point-in-time measures?

“…Although one’s real income is expected to rise with accumulation of experience and expertise in the workforce, there may be considerable volatility over a lifetime (Duncan, 1988; Solon, 1992; Zimmerman, 1992). Rank & Hirschl (2001) estimate that half of Americans will experience either poverty or affluence at least one year between the ages of twenty-five & seventy-five while only 20 percent will experience neither end of the economic spectrum. Temporary or short-term fluctuations may be a consequence of job loss or exit from the labor force for various reasons, such as returning to school.…”

The role of socioeconomic factors in Black-White health inequities across the life course: Point-in-time measures, long-term exposures, and differential health returns

“…For one, annual income is unstable over time and does not necessarily reflect long term economic stability or instability. Income levels throughout the life course are incredibly volatile, and most individuals experience several sharp losses and gains in income throughout their lives (Duncan 1988; Rank and Hirschl 2001). Research suggests that slightly more than half of the U.S. population will experience poverty or affluence at some point in their lives, while only 20 percent of individuals will experience neither end of the income distribution (Rank and Hirschl 2001).…”

“…Income levels throughout the life course are incredibly volatile, and most individuals experience several sharp losses and gains in income throughout their lives (Duncan 1988; Rank and Hirschl 2001). Research suggests that slightly more than half of the U.S. population will experience poverty or affluence at some point in their lives, while only 20 percent of individuals will experience neither end of the income distribution (Rank and Hirschl 2001). Of those who experience poverty, most experience poverty spells of less than four years and approximately 50 percent exit poverty within a year (Stevens 1999).…”