Old age poverty in the Indian States: What do the household data tell us?

Abstract

In the absence of any official measures of old age poverty, this paper uses National Sample Survey household-level data to investigate the extent and nature of living standards and incidence of poverty among elderly in sixteen major states in India. We construct both individual and household-level poverty indices for the elderly and examine the sensitivity of these poverty indices to different equivalence scales and size economies in consumption. Our analysis highlights the complex nature of old age poverty in the Indian states. While poverty estimates taking into account equivalence scale and size economies in consumption suggest that households with elderly members are less poor than others, the interpretation of this result is more complex. Further analysis suggests that the results are partly a function of differences in demographic composition of the households and a possible survivorship bias due to positive correlation between household incomes and life expectancy. After correcting for the possible sources of bias (including the survivorship bias), there is evidence that poverty is increased by the presence of older elderly (75 and above) in all states. Meanwhile, the conclusion that households with elderly aged sixty and above are less poor appears to be robust across most states.