Throughout the 20th century, the number of Americans 65 years and older grew rapidly, from 3.1 million in 1900 to 35 million in 2000. According to U.S. Census projections, that rate of increase is expected to accelerate, so that by the year 2030, those 65 and older will represent 20 percent of the total U.S. population (U.S. Census, 2005). Since women have a longer life expectancy than men, most of the “elderly” population will be composed of women, and they likely will be unmarried, since women age 65 and older are more likely to be widowed, divorced, or never married than their male counterparts (U.S. Census Bureau, 2005). Furthermore, although women have increased their labor force participation in the past decade, older women are more likely than older men to live in poverty (U.S. Department of Labor, 2007).
It is for this reasonthe rapid erosion of economic well-being of women in America, especially elderly womenthat I became interested in this phenomenon, and have devoted myself to it for the past several years. As I studied the literature, it became clear that researchers consistently have concluded that an ever-increasing number of women are destined to be in poverty in their later years.
My research also was motivated by interviews I conducted with women over the years, who graciously shared their stories with me. I became acutely aware from these conversations of how vulnerable women are in terms of their financial security, and how such vulnerability is directly related to their marital status, i.e., their experiences varied greatly depending on their marital status, with married women seeming to have the most economic security.
In the following chapters of this book, I mainly focus on this relationship between marital status and the financial security of women through the life course. My analysis shows that the presence or absence of a spouse greatly impacts the sources of income and wealth available to women, and, as a result, generally affects their economic security.
Older women are especially vulnerable, as they are most likely to be widowed or divorced, and thus have fewer sources of income and other assets available to them. Moreover, for women of all marital statuses, I discuss why decisions and circumstances that occur early in life have a direct impact on economic outcomes later in life.
Women are more likely than men, for example, to work in part-time employment, to interrupt their careers during the years they are raising their children, and to care for an aging parent or spouse. Thus, they receive less income from pensions and Social Security retirement benefits in their later years.
For older individuals, economic security is based not only on income, of course, but also on accumulated assets. I therefore examined the impact of marital status on wealth, which I conventionally define in terms of home ownership, savings and checking accounts, and other financial resources available to individuals and couples. Accumulated wealth prevents or delays the descent into poverty, especially when incomes decrease because of an adverse event such as job loss, health problems, or family changes.
While the impact of marital status on the economic security of women is the main focus of this book, I also took into account other factors that may mediate this relationship. These factors include age, ethnicity or race, work history, parental status, and number of children, all of which interact with each other to influence life course outcomes for women.
A major aspect of this book derives from a unique analysis I conducted on the 2002 Rand Advance Data File of the Health and Retirement Study (HRS). Using nationwide data collected from 10,389 women, I examined how martial status impacts the sources of income and wealth available to women age 50 and over who were married, divorced, widowed, or never married.
The findings from the HRS data analysis and prior empirical studies are supplemented in this book by information I collected from women I interviewed during 2007. Their intimate stories help “bring to life” the statistical findings as well as convey the types of situations women of different marital statuses are living through today.
Although the findings presented in this book demonstrate that married women have access to more sources of income and wealth than their unmarried counterparts, and, therefore, have more economic security, current trends threaten the ability of marriage to ensure financial security for women in the near future, especially older women. The collapse of Enron, for example, resulted in thousands of that company’s employees and investors losing all of their savings, children's college funds, and pensions. In the corporate world in general, over the last three years there has been a growing list of pension failures, including 20 companies that defaulted on pension funds of more than $100 million each (AARP, 2007).
Several other factors have contributed to the weakened state of the traditional pension system, including the stock market’s fall from 2000 through 2002, low interest rates, and a recession that resulted in reduced company earnings. Those individuals most likely to be affected by the upheaval of pensions are presently in their 50s. Although they are not old enough to have earned a large, protected, pension benefit, they do have a few years left to build a “nest egg,” before they reach retirement age.
Another major threat to the economic security of older Americans in the near future, especially unmarried women, is the failing Social Security system. Policy makers continue to debate the future of Social Security, with some implying that the institution itself should be radically changed and possibly abolished, given the impending demand on the system from aging “boomers.”
The above “gloom and doom” picture is, of course, offset by various positive economic trends, including those for women. Over the past several decades, for example, women increasingly have been working outside the home for income, and in 2006 they constituted 46 percent of the total labor force. The largest percentage of employed women works in management, professional, and related occupations.
In addition, women’s incomes have increased relative to men’s, though the median weekly earnings of women who work full time is still only 81 percent of men’s earnings, with women earning, on average, $600 and men earning, on average, $743 (U.S. Department of Labor, 2007). Furthermore, older women over the age of 55 are remaining in the work force longer. They now compose 15.6 percent of the total female labor force and 46 percent of employed individuals 55 and over (U.S. Department of labor, 2007).
Despite the above trends, however, less than half of the salaried women working in the United States participate in a pension plan. Moreover, a female retiring at age 55 can expect to live another 27.5 yearsfour more years than a male retiring at the same age.
Savings can increase a woman’s chance of having enough money to last during her later years, but women tend to invest more conservatively, and receive lower rates of return from their investments over time, thus reducing the amount of savings they have at retirement (Orman, 2007). Thus, although women have made great strides in attaining financial security in their later years, their futures seem to be more insecure.
Given all of the countervailing tendencies in our society that affect people’s economic lives, a clear and comprehensive analysis of the factors that both positively and negatively affect the financial security of women is vitally needed. I hope to have provided that analysis in this book, especially by detailing the impact of marital status on economic well-being, both alone and as modified by women’s demographic and background characteristics.
Based on my findings, I also have made policy recommendations that I believe can help to prevent or delay threats to the economic security of all Americans in the near future. In particular, I hope I have contributed to the national dialogue on the looming prospects for older women, especially those who are unmarried, by raising awareness of vital economic and social issues that will impact their financial well-being, and emphasizing the importance of creating new economic policies and institutions to address the impending changes that are certain to adversely affect the lives of tens of millions of “boomers” as they reach “old age” in the early decades of the 21st century.
