Certain patterns visible on the map of the transfer share are familiar: the crescent of prosperity along the eastern seaboard, rising in the metropolitan Mountain West, or running along California’s coast, as well as the ridges of distress in Appalachia and straddling the South. [...] In percentage point terms, the 65 and over share of the population rose as much in the 10 years from 2010 to 2020 as it did in the 50 years from 1960 to 2010.7 In the 2010s, each percentage point increase in the share of the population 65 and over was associated with a 0.6 percentage point increase in the transfer share of personal income, all else equal. [...] The largest jump occurred between the 1990s and the 2000s, as the effect of a 1.0 percentage point increase in the share of the population 65 years or older on the transfer share of personal income increased from 0.50 percentage points to 0.59 percentage points. [...] We find that the employed share of the population would need to increase by 1.2 percentage points to offset a single percentage point increase in the share of the population 65 and over.20 How can we compare the relative impact of an aging population and shifts in the prevalence of poverty across the country over time? We can use our regression to predict what the transformation might have looked. [...] In the case of aging, we are looking to explore the simple relationship between the transfer share of personal income and the share of the population over the age of 65.
Authors
- Pages
- 34
- Published in
- United States of America
Table of Contents
- Introduction 2
- Government transfers are an increasingly important part of American incomes 4
- Geographic divides in how much places rely on transfer income are immense 8
- Transfer income varies much less across places than other earned income 8
- Transfers account for at least a quarter of all income in more than half of all counties 9
- The transfer share runs highest in order, poorer, and more rural areas 11
- The rural-urban transfers divide 13
- Local factors drive variation in the transfer share 18
- Economic and demographic fundamentals determine the level of transfer spending 18
- Aging structurally increases the transfer share 20
- The marginal effect of program expansions 20
- Aging through attraction versus attrition 20
- Economic stagnation has further boosted the transfer share 23
- Discussion -1
- Appendices 26
- I. Sources and methods 26
- Government Transfer Income is provided directly by BEA in CAINC35, which consists of: 27
- Non-Transfer Income is defined as total personal income minus transfer payments from governments, which is (Total Personal Income - Government Transfer Income). We include transfers from non for profit institutions and businesses in this “non-transf... 27
- a. Net earnings adjusted by place of residence (CAINC 4, line 45) 27
- b. Dividends, interest, and rent (CAINC 4, line 46) 27
- c. Current transfer receipts of nonprofit institutions (CAINC 35, line 3000) 27
- d. Current transfer receipts of individuals from businesses (CAINC 35, line 4000) 27
- II. Decomposing the drivers of the transfer share 27
- III. Random Forest Analysis 32
