The University Record, April 19, 1999

$3.5M grant expands ISR income study

By Diane Swanbrow
News and Information Services

U-M researcher Frank P. Stafford has received a $3.5 million grant from the National Institute on Aging to study wealth and health through the life course. The new study is an expansion of the Panel Study of Income Dynamics (PSID), a longitudinal survey of a representative sample of U.S. men, women and children.

"This expansion will provide a more comprehensive picture of the relationships between health, wealth and other aspects of individual and family well-being," says Stafford, professor of economics and senior research scientist at [the Institute for Social Research]. "For example, we know that a substantial proportion of American families have no accumulated assets.

"Is it simply the case that some families are 'grasshoppers' who don't save and others are 'ants' who do? Or are there many unlucky ants who lost their jobs and had expenses for health-care that prevented them from saving or depleted their savings? To what extent is life course well-being dependent on social networks, family relations and a host of other factors, including public policies across states and over time?"

Conducted at ISR since 1968, the PSID began by collecting data on employment, income, housing, food expenditures and marital and fertility behavior in 5,000 families. These same families are surveyed year after year, and when children leave home, they continue in the study as they form households of their own. By 1996, the study included almost 9,000 families and 30,000 individuals.

Expansion of the study will provide analysts with reliable information on changes in savings and consumption, and, since the study includes almost 5,000 baby boomers born between 1945 and 1964, it also will measure wealth and active savings prior to and during important life changes, such as retirement.