The Effects of Demographic Trends on Consumption, Saving and Government Expenditures in the U.S
This paper reviews and analyzes forecasts of the Social Security trust funds, government spending, medical expenditures, and other elements of aggregate income and spending. According to these forecasts, the aging of the U.S. population will require some increases in taxes to support the retirement system. It should reduce the saving rate, and the composition of output will change. By themselves, these changes seem manageable. However, the direct effects of aging are completely dominated by the projected increases in medical expenditures. Although medical costs interact with aging, most of the increases are not related to aging. Even the moderately high forecast of medical spending will require that all increases in output between now and 2020 be devoted to the consumption of medical services, allowing no increase in any other component of consumption.
|Date of creation:||Dec 1993|
|Date of revision:|
|Publication status:||published as The Economic Effects of Aging in the United States and Japan, Michael D. Hurd and Naohiro Yashiro, eds., pp. 39-57, (Chicago: University of Chicago Press, 1997).|
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- Michael D. Hurd, 1990.
"Wealth Depletion and Life Cycle Consumption by the Elderly,"
NBER Working Papers
3472, National Bureau of Economic Research, Inc.
- Michael D. Hurd, 1992. "Wealth Depletion and Life-Cycle Consumption by the Elderly," NBER Chapters, in: Topics in the Economics of Aging, pages 135-162 National Bureau of Economic Research, Inc.
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