Data from the Great Recession could help us understand how the current COVID-19 economic downturn will affect older adults.
People over age 60 are considered to be most vulnerable to the coronavirus. But this group may also be particularly vulnerable to the economic recession/depression that is fast developing as a result of the virus, according to a new data brief published by National Council on Aging (NCOA).
The brief was written by Marc Cohen, co-director of the LeadingAge LTSS Center @UMass Boston; Jane Tavares, a LTSS Center research fellow; and Susan Silberman and Lauren Popham from NCOA.
The authors analyzed 2006-2010 data from the Health and Retirement Study (HRS) for working and retired individuals in 2 age categories: 60-74 and over age 74. They were seeking to determine:
- How the financial status of older adults was impacted by the Great Recession that began with the collapse of financial markets in 2008.
- What might be at stake for older Americans in light of current economic challenges.
Findings suggest that older adults over age 60 experience a decrease in total net wealth and take on greater debt during times of recession. Researchers also saw significant increases in post-recession poverty status among those 60 and older.
Retired individuals over age 74 tended to fare somewhat better overall during the 2008 recession. The data suggests that these older adult had greater financial stability, possibly due to government benefits such as Social Security and Medicare, and the greater likelihood that they owned their homes and had made more conservative investments.
“This underscores the importance of government benefits as a means of buffering financial collapse among older adults, particularly for those who are currently relying on income from an employer and may suddenly find themselves unable to work,” the authors write.
COVID-19 adds a health component that will likely have devastating consequences for this age demographic on top of any economic impacts, warn the authors.
“Taking into account both the economic effects of a recession and the heightened health risk to our older citizens will be vital for navigating the impact of COVID-19 during this time of uncertainty,” they conclude.