Age

The cross-sectional evidence used compares different households at a single point in time, rather than the fortunes of a single household over time. For this reason, if for example the proportion of older households in the middle sector is lower than for younger households, one cannot conclude that today’s younger households risk falling into poverty as they age. The difference may instead be a reflection that today’s older households had fewer economic opportunities and have accumulated less wealth and education during their lives. Bearing this in mind, two patterns emerge in the relationship between age of household head and middle-sector status (Table 1.1).

First, in Mexico and Costa Rica the proportion of middle-sector households falls for older household heads, while in the remainder older households are in fact more likely to be in the middle sector than younger ones. The latter pattern is consistent with a life-cycle of wealth accumulation by households, and reasonably good social insurance coverage.