The Wealth and Poverty of Widows: Assets Before and After the Husband's Death
NBER Working Paper No. 2325 (Also Reprint No. r1143)
We verify that widows are much more likely than couples to be poor and that they make up a large proportion of the poor elderly; 80 percent are widows or other single individuals. Then we seek to explain why the single elderly are poor, with emphasis on widows. We do this by tracing back over time their financial status, using the Longitudinal Retirement History Survey. The death of the husband very often induces the poverty of the surviving spouse, even though the married couple was not poor. While only about 9 percent of prior couples are poor, approximately 35 percent of the subsequent widows are. A large proportion of the wealth of the couple is lost when the husband dies. In addition we find that: (1) the prior households of poor widows earned and saved less than the prior households of non-poor widows, (2) more of the smaller accumulated wealth was lost at the death of the husband, (3) the absence of survivorship benefits or life insurance insured that the loss in wealth would leave the widow poor thereafter.