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Provide, Provide: The Economics of Aging


  • Victor R. Fuchs


Data from the Bureau of the Census, the Health Care Financing Administration, the NBER Tax File and the Current Population Survey are used to estimate for the elderly (ages 65 and above) consumption of health care and income available for other goods and services in 1975, 1985, and 1995. Extrapolation of 1975-1995 and 1985-1995 trends are used to obtain projections for 2020. Even the more conservative projection shows that in 2020 health care for the elderly would consume 10 percent of the GDP, and income available for other goods and services would show an absolute decline from the 1995 level. Changes in age-specific consumption of health care are found to be much more important than demographic changes. Income inequality among the elderly in 1995 is found to be much less than at younger ages.

Suggested Citation

  • Victor R. Fuchs, 1998. "Provide, Provide: The Economics of Aging," NBER Working Papers 6642, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6642
    Note: AG

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    References listed on IDEAS

    1. McClellan, Mark & Skinner, Jonathan, 2006. "The incidence of Medicare," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 257-276, January.
    2. Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus, 1996. "Understanding the Postwar Decline in U.S. Saving: A Cohort Analysis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 315-407.
    3. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, vol. 18(2), pages 173-193, April.
    4. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
    5. Fuchs, Victor R, 1996. "Economics, Values, and Health Care Reform," American Economic Review, American Economic Association, vol. 86(1), pages 1-24, March.
    6. Joseph F. Quinn & Kevin Cahill & Richard V. Burkhauser & Robert Weathers, 1998. "The Microeconomics of the Retirement Decision in the United States," Boston College Working Papers in Economics 400, Boston College Department of Economics.
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    Cited by:

    1. Victor R. Fuchs, 2000. "Medicare Reform: The Larger Picture," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 57-70, Spring.
    2. Chapin White, 2006. "The Slowdown in Medicare Spending Growth: Working Paper 2006-08," Working Papers 18017, Congressional Budget Office.
    3. Julie Lee & Mark McClellan & Jonathan Skinner, 1999. "The Distributional Effects of Medicare," NBER Chapters,in: Tax Policy and the Economy, Volume 13, pages 85-108 National Bureau of Economic Research, Inc.
    4. Sanjay Mohanty & Rajesh Chauhan & Sumit Mazumdar & Akanksha Srivastava, 2014. "Out-of-pocket Expenditure on Health Care Among Elderly and Non-elderly Households in India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(3), pages 1137-1157, February.
    5. Loïc Cadiou & Julien Genet & Jean-Louis Guérin, 2002. "Évolutions démographiques et marché du travail : des liens complexes parfois contradictoires," Économie et Statistique, Programme National Persée, vol. 355(1), pages 139-156.
    6. Stijepic, Denis & Wagner, Helmut, 2009. "Population-ageing, structural change and productivity growth," MPRA Paper 37005, University Library of Munich, Germany, revised 29 Feb 2012.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination


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