Financial Distress among the Elderly: Bankruptcy Reform and the Financial Crisis

Wharton Pension Research Council Working Paper No. 2019-11

Published in Mitchell, O., and A. Lusardi (Eds.) (2020). Remaking Retirement: Debt in an Aging Economy. Oxford, UK: Oxford University Press.

Posted: 20 Feb 2020 Last revised: 30 Nov 2020

See all articles by Wenli Li

Wenli Li

Federal Reserve Bank of Philadelphia

Michelle J. White

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: May 2, 2019

Abstract

Both the proportion of bankruptcy filings that are by the elderly and the proportion of foreclosure starts that affect the elderly have increased dramatically over the past twenty years — suggesting an increase in financial distress of the elderly relative to younger age groups. In this paper, we use new data to examine whether these trends can be explained by either of two events: the 2005 bankruptcy reform and the 2008 financial crisis. Our results show that while these events made both the elderly and younger age groups worse off, they do explain the increase in relative financial distress of the elderly.

Keywords: older adults, financial distress, foreclosure, bankruptcy, retirement

Suggested Citation

Li, Wenli and White, Michelle J., Financial Distress among the Elderly: Bankruptcy Reform and the Financial Crisis (May 2, 2019). Wharton Pension Research Council Working Paper No. 2019-11, Published in Mitchell, O., and A. Lusardi (Eds.) (2020). Remaking Retirement: Debt in an Aging Economy. Oxford, UK: Oxford University Press., Available at SSRN: https://ssrn.com/abstract=3540468 or http://dx.doi.org/10.2139/ssrn.3540468

Wenli Li

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Michelle J. White (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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