Rags or riches? Estimating the probabilities of poverty and affluence across the adult American life span

Objective. Poverty and affluence represent events central to the American identity of failure and success. Yet in spite of their significance, we know little about the actual likelihood of experiencing these events across the adult life course. In this article we empirically estimate the extent to which Americans will experience poverty and/or affluence during their adulthood. Methods. A series of life tables are constructed based upon data from 25 waves of the Panel Study of Income Dynamics. Our measure of poverty is identical to that used by the U.S. Census Bureau in estimating the overall U.S. poverty rates. Affluence is defined as 10 times the poverty level. Results. Results indicate that between the ages of 25 and 75, 51.1 percent of Americans will experience at least one year below the poverty line, 51.0 percent will encounter a year of affluence, while only 20.1 percent of Americans will avoid either of these economic extremes. The effects of race and education in altering the likelihood of encountering poverty versus affluence are substantial. Conclusions. The opportunities for acute economic failure and success appear to be very real components of the American experience. Based upon this, we discuss an alternative typology to conceptualizing stratification in America.