Income, Material Hardship, and the Use of Public Programs among the Elderly

Published: 2009


I use data from the 2006 Health and Retirement Study to analyze the determinants of material hardship among individuals ages 65 and older. Ten percent of the elderly report hardship – defined here as cutting back on food or medications because of cost – in 2006. Although hardship is more likely for poorer individuals and, to some extent, for recipients of public transfer programs (Medicaid, Food Stamps, and/or Supplemental Security Income), the majority of those experiencing hardship are not poor and do not participate in these programs. In multivariate models, I find that self-reported health and activity limitations are significant predictors of hardship.

Key Findings

    • In 2006, ten percent of the elderly over 65 cut back on medications or food because of their cost.
    • Three-quarters of the elderly who cut back on food or medications are not considered poor and do not receive any public assistance.
    • Seniors who report poor health or more limitations on physical activity are much more likely to cut back on food or medications.