Abstract: Paper No. 10

How Older People in the United States and Germany Fared in the Growth Years of the 1980s-A Cross-Sectional versus Longitudinal View

Amy D. Crews and Richard V. Burkhauser.

August 1997

Abstract:  This paper uses data from the United States Panel Study of Income Dynamics and the German Socio-Economic Panel to show how persons living in younger and older households fared during the period of strong economic growth that followed the deep recession of the early 1980s. Cross-sectional comparisons of trough and peak years suggest that the fruits of economic recovery were relatively equally shared between persons living in younger and older households in both countries. However, longitudinal data shows that persons living in older households in both countries received a substantially smaller share of the rewards of recovery, with the entire distribution of income of persons living in older households shifting to the left in the United States. Part of the reason why persons living in older households in Germany did relatively better than persons living in older households in the United States is that yearly adjustments in the German social security retirement system are tied to increases in wages rather than prices as is the case in the United States.

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