We analyzed the economic consequences of a husband’s death using events that occurred
between the first two waves of the HRS and AHEAD studies. We compared poverty
transitions against published results from Social Security’s Retirement History Survey of
the 1970s. Widowhood remains an important risk factor for transition into poverty,
although somewhat less so than twenty years ago. Women over age 65 (AHEAD) are
less likely to experience severe economic changes than women under age 61 (HRS).
Several factors account for the age differences: the declining importance of husband’s
earnings with age, the rising importance of Social Security benefits, and the occasionally
large out-of-pocket medical expenses associated with husband’s death before Medicare
eligibility. The greater economic impact of widowhood at younger ages is consistent
with our cross-section evidence that poverty rates rise with duration of widowhood but
are only weakly associated with age.