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May 1993, Vol. 116, No. 5
Pamela B. Hitschler
As the century draws to an end, more attention is being focused on the aging of the Nation's population. Persons aged 65 years and older will comprise more than 14 percent of the U.S. population by 2010, and 22 percent by 2030.1 (See table 1.) Today, 1 in 8 consumer units has a household head aged 65 or older.2 With such a large demographic shift, spending patterns in the economy will change. Over the last 10 years, the population aged 65 and older has grown by 22 percent, compared with 9 percent for those under the age 65.3 Among persons 65 and older, the rate of population increase rises with age. During the 1980's, the population aged 65 to 74 grew by 16 percent, while the numbers of persons aged 75 and older rose 31 percent.4 The economic consequences of an aging population are being studied closely by economists, sociologists, and policymakers.
An earlier article in the Review, which examined the expenditures of older persons using 1984 data from the Bureau of Labor Statistics Consumer Expenditure Survey, reported distinct differences in spending patterns between persons aged 65 to 74 and those aged 75 and older.5 In particular, differences were found in expenditures for housing, transportation, and health care. Differences also were found in income. This article updates estimates of expenditures and income for the same two age groups. Consumer units (or "households")6 whose reference person (or "household head") is aged 65 to 74 are referred to as the "younger group," while those with reference persons aged 75 and older are termed the "older group."
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1 Gregory Spencer, Projections of Population of U.S., by Sex, Age, and Race 1980 to 2080, Current Population Reports, Series P-25, No. 1018 (Bureau of the Census, January 1989).
2 Cynthia Taeuber, Sixty-five Plus in America, Current Population Reports, Special Studies P23-178 (Bureau of the Census, 1992).
4 Ibid. The population aged 75 to 84 grew by 30 percent. The cohort aged 80 and older grew by 33 percent.
5 Beth Harrison, "Spending patterns of older persons revealed in expenditure survey," Monthly Labor Review, October 1986, pp.15-17
6 A consumer unit is either (1) all members of a household who are related by blood, marriage, adoption, or other legal arrangements; (2) two or more persons living together who pool their income to make joint expenditure decisions; or (3) a person living alone or sharing a household with others, or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is financially independent. A person is considered financially independent if he or she provides the income for at least two of the three major living expenses—food, clothing, and shelter. The terms consumer unit and household are used interchangeably throughout this article.
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