DISPLACING THE FAMILY - UNION ARMY PENSIONS AND ELDERLY LIVING ARRANGEMENTS

I investigate the factors that fostered the rise in separate living qu arters for the aged prior to Social Security by estimating the income effect of the first major pension program in the United States, that c overing Union Army veterans. I find that income substantially increase d demand for separate living arrangements, suggesting that prior to 19 40 rising incomes were the most important factor enabling the elderly to live alone. Comparisons with recent studies imply that income no lo nger plays as large a role, perhaps because income levels are now high er and independent living is both less expensive and more attractive.