Living in poverty is not just something that happens to the other guy in the US. More than 60% of Americans go through serious economic difficulty at some point in their life, according to a new study by Mark Rank at Washington University in St. Louis, highlighted at Wonkblog.
Using data from the Panel Study of Income Dynamics, the study found that 61% of people will be in the bottom 20% of the US income distribution for at least a year, and 42% in the bottom 10%.
A quarter will spend five or more years in poverty (the bottom 20%), and 11% will spend five years in extreme poverty (bottom 10%).
Here’s the likelihood of spending a year in the bottom fifth of the US income distribution, depending on age:
Being unmarried, less educated, a racial minority, female, or having a work disability all tend to increase the likelihood of extreme poverty.
Luckily, most people manage to escape at some point. While a year or two at the bottom is very common, a person is much less likely to spend five or more consecutive years impoverished:
Another bright spot? A full 70% of Americans also spend at least a year in the top 20% of the distribution. It all suggests that while the American dream is still alive, even the wealthy are likely less secure than they’d like to think.