Patterns of economic change surrounding the death of a spouse

Abstract

The timing of economic changes near the death of a spouse is not well understood. Using multiple regression analysis and longitudinal data from the Panel Study of Income Dynamics, the economic situations of middle-aged and older widows and widowers were compared to those of otherwise similar intact couples over an 11-year period. The analysis shows that all four widowed groups had fewer economic resources 5 years after the death than did their married counterparts. Yet, each group took very different economic paths to get to this point. For example, older widows and widowers begin the analysis with significantly lower income-to-needs ratios 5 years prior to the death, while middle-aged widows experience more economic change near the time of the death. These findings suggest that both middle-aged and older cohorts of widowed individuals may have made consumption choices over the life cycle that differ from those made by their intact counterparts.