1 Dynamics of Economic Well-Being and Safety Nets among the Aging in Mexico Deborah S. DeGraff, PhD Rebeca Wong, PhD Karina Orozco-Rocha, PhD Bowdoin College University of Texas Medical Branch Research Consultant ddegraff@bowdoin.edu rewong@utmb.edu k_orozco@hotmail.com Introduction: This paper constitutes the first stage of a larger project focusing on the impact of health status on the economic well-being of older persons in Mexico. The overall project has two aims: (1) to identify sources of income and components of wealth among older persons, how these differ by age cohort and key characteristics (including measures of health status), and how they change over time, and (2) to assess the extent to which health status of the elderly impacts their economic well-being, as represented by income and wealth, and whether this varies by the availability of safety nets (defined below). Our over-arching project hypothesis is that the health of those with fewer safety net options will have a stronger effect on their economic well-being. This paper focuses on the first aim. Our hypothesis is that the number of sources of income and components of wealth for those aged 50 and older will be fewer, and the total monetary amounts smaller, among the oldest individuals, less healthy individuals, and those at the lower end of the economic scale, in comparison to those who are younger, healthier and at the high end of the economic scale. We use longitudinal data from the Mexican Health and Aging Study (MHAS) (described below) to explore these questions. Our objective is to derive measures of economic well-being ─ income and its sources, and wealth and its components ─ for the cohorts of older adults represented in the MHAS, and to determine how these measures change between 2001 and 2012. This analysis will be carried out for the full MHAS sample, as well as for sub-samples defined by indicators of safety net options and by other key characteristics described below. This detailed characterization of income and wealth will serve to identify the most important contributors to economic well-being in old age in Mexico, how these differ across sub-groups of the population, how they differ by indicators of health status, and how they change over time as individuals age and society changes. Background & Motivation: A large percentage of the world’s population resides in developing countries that have begun to experience rapid aging, yet, largely owing to a lack of data, little is known about the economic position of the elderly in such societies. In particular, empirical evidence regarding the sources of economic support among older adults – e.g., income from continued employment, accumulated assets, financial transfers from family, institutional support – and how these change as individuals age, is lacking. In addition, while there is considerable evidence from industrialized countries regarding the positive effect of good health on the economic well-being of the elderly (see, for example, Cutler and Lleras 2006; Mackenbach et al. 2008; Smith 1999; Smith 2007), it is unclear whether such findings translate to a developing country context such as Mexico. On the one hand, the lack of well-developed social welfare institutions for the elderly (e.g., Social Security, Medicare), as well as underdeveloped financial institutions, suggest that health status, operating through one’s ability to continue to earn labor income, is likely to be a more important determinant of economic well-being than in wealthier countries. On the other hand, the greater emphasis on familial support for the elderly in many developing societies may render health status less important to their economic position. Over