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September 1996, Vol. 119, No. 9
Rose M. Rubin and Kenneth Koelin
Questions concerning the well-being of the elderly population in the United States are central to the resolution of numerous policy questions, including changes in health care and Social Security, Federal budget deficits, and intergenerational transfers. After substantial growth during the 1970s, real social welfare expenditures under public programs grew more slowly through the 1980s.1 At the same time, the population aged 65 and older continued to grow, both in absolute numbers (from 25.5 million to 31.1 million) and as a share of the U.S. population (from 11.3 percent to 12.5 percent).1 The research presented in this article ties together the related issues of the growing elderly population and the flattening of growth of public social support programs.
Using data from the Bureau of Labor Statistics (BLS) Consumer Expenditure (CE) Survey, the article examines whether elderly households spent proportionally more on necessities in 1990 than in 1980. The article also compares elderly households with nonelderly households in both years, to determine their relative welfare. Because poorer households invariably have minimal spending discretion, having to allocate most of their expenditures to necessities, the measures of economic welfare used are real income and the share of total household expenditures on food, housing, and health care. Specifically, we address the following questions: (1) What changes occurred between the two survey years in expenditures on necessities by elderly households, compared with nonelderly households? (2) What socioeconomic factors affected these expenditures? and, in particular, (3) Were there differences in expenditure patterns between recipients of cash for assistance and other households?
Our findings reveal that over the decade, both discretionary spending and real income per household increased for most groups. However, recipients of cash assistance did not share equally with nonrecipients in the increases in household real income, although their real income did not decline. The group which realized the largest increase in well-being was elderly households that did not receive cash assistance.
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1 From 1970 to 1980, social welfare expenditures under public programs increased from 14.8 percent of gross domestic product (GDP) and from 46.5 percent to 57.2 percent of total government outlays. Then, from 1980 to 1990, the growth of social welfare expenditures flattened as a percentage of GDP, to 19.1 percent, and declined as a percentage of total government outlays, to 56.6 percent. (See Statistical Abstract of the United States: 1993, 113th edition (Bureau of the Census, 1993).)
1 Statistical Abstract of the United States: 1994, 114th edition (Bureau of the Census, 1994).
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