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The Economics of an Aging Society

ISBN: 978-0-631-22616-1
360 pages
February 2004, Wiley-Blackwell
The Economics of an Aging Society (0631226168) cover image


Written by leading thinkers in the field, this text provides an in-depth analysis of the economic and policy issues associated with individual and population aging. The text has a strong policy focus based on demographic and economic analysis, making this book both accessible and challenging to readers with limited mathematical background.

  • Written by leading thinkers in the field of the economics of aging.
  • Employs a strong policy focus based on demographic and economic analysis.
  • Provides a comprehensive international picture of the consequences of aging.
  • Engages the reader through side boxes, relevant website addresses, and practice questions.
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Table of Contents

List of Figures.

List of Tables.


1. Introduction.

Part I: Population Aging and the Income of the Elderly.

2. The Graying of America and the World.

3. The Economic Well-being of Older Americans.

Part II: Retirement Planning and Policies.

4. Economics of Retirement and Old Age.

5. Work and Retirement.

6. Retirement Policies and Pension Plans.

Part III: Social Security Programs and Reforms.

7. Social Security Benefits and Program Objectives: An Individual Perspectives.

8. Social Security Financing and Reform Issues.

9. Disability Policy.

Part IV: Health and Long Term Care for Older Persons.

10. The Financing and Delivery of Acute Health Care Services.

11. Additional Health Issues: Long Term Care.


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Author Information

Robert L. Clark is Professor of Economics at North Carolina State University.

Richard V. Burkhauser is the Sarah Gibson Blanding Professor of Policy Analysis and Chair of the Department of Policy Analysis and Management in the College of Human Ecology, Cornell University.

Marilyn Moon is Vice President and Director of Health at the American Institutes for Research.

Joseph F. Quinn is Dean of the College of Arts and Sciences at Boston College.Timothy M. Smeeding is Maxwell Professor of Public Policy and Professor of Economics and Public Policy at Syracuse University.

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The Wiley Advantage

  • Written by leading thinkers in the field of the economics of aging.

  • Employs a strong policy focus based on demographic and economic analysis.

  • Provides a comprehensive international picture of the consequences of aging.

  • Engages the reader through side boxes, relevant website addresses, and practice questions.
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"A very well balanced appraisal of the enormous benefits as well as the real challenges facing the United States and our social insurance programs in the twenty-first century. This excellent text will help both students and policy makers to be better informed about the economics of population aging as well as the direct and indirect consequences of alternative actions." Kenneth Apfel, Lyndon B. Johnson School of Public Affairs, University of Texas

"The Economics of an Aging Society should be required reading in any economics or policy course for gerontology students. What is new and praiseworthy about the text is its melding of economic and policy analyses. The reader is given the context and models to understand the economic choices that governments, firms, and individuals must make in an aging society. The book is ultimately empowering." Charles Longino, Wake Forest University

"A valuable new contribution to the understanding of current economic challenges and responsive policy options facing aging societies. The authors provide useful illustrations of how economic data are used in evaluating policy options, addressing complex issues such as retirement, income maintenance, social security, and health care." George L. Maddox, Duke University Center for Aging

"This book is a useful compendium that addresses the problems of financing and providing care for a growing elderly population in the US. Although the authors intended this book to be used as a textbook, individual chapters might serve as supplemental reading for courses that cover more targeted topics, such as poverty, social insurance, or healthcare. The book would also be a useful addition to a reference collection on programs available to the elderly in the US." Lois B. Shaw, Feminist Economics

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Economics of an Aging Society - Online Supplements

Welcome to the The Economics of an Aging Society webpage. Here you will find online supplements including Links and Resources, Syllabi, and a Feedback Section.

Links & Resources

1. Introduction, general references

Policy Oriented Gerontology Curriculum. The Center for Policy Research at Syracuse University has created policy-oriented issues components for gerontology and geriatrics curricula. These components deal specifically with a variety of social policy issues involving aging Americans. The components provide timely and accurate information on terms, trends, debates, and legislation surrounding the issues. This information is continually updated and makes use of the new technology of the Internet for providing current knowledge and access to a wide variety of resources. http://www-cpr.maxwell.syr.edu/gero_ed/index.htm

AARP. Beyond 50: A Report to the Nation. In its ongoing Beyond 50 series of annual reports, AARP assesses the state of America's aging population in such vital and significant areas of concern as economic security and health care. http://research.aarp.org/general/beyond_50.html

Population Reference Bureau. For more than 70 years, the Population Reference Bureau has been informing people about the population dimensions of important social, economic, and political issues. Their mission is to be the leader in providing timely and objective information on U.S. and international population trends and their implications. http://www.prb.org

Older Americans 2000: Key Indicators of Well-Being. This report covers 31 key indicators selected by the Federal Interagency Forum on Aging-Related Statistics to portray aspects of the lives of older Americans and their families. It is divided into five subject areas: population, economics, health status, health risks and behaviors, and health care. Link

Age Data. Washington, DC: U.S. Bureau of the Census. Link

National Vital Statistics Reports. Hyattsville, MD: National Center for Health Statistics. Regular issues cover provisional birth, death, marriage, and divorce statistics. Four to six special reports are issued per year. Special reports cover final data on births for the previous year, and special topic analyses are issued from time to time. Link

U.S. Census Bureau. The International Data Base (IDB) is a computerized data bank containing statistical tables of demographic and socio-economic data for 227 countries and areas of the world. Link

United Nations Population Division. The official United Nations demographic estimates and projections are prepared for all countries and areas of the world, as well as urban and rural areas and major cities, and serve as the standard and consistent set of population figures for use throughout the United Nations system. International migration, infant, child and maternal mortality and increased adult mortality in some regions, as well as the demographic impact of AIDS, are critical emerging issues that are also addressed. Other priority areas for analysis are fertility levels, trends and their determinants, including contraceptive use as well as national population policies and the relationships among population dynamics and development issues. Link

The Economic Report of the President is an annual report written by the Chairman of the Council of Economic Advisors. It overviews the nation's economic progress using text and extensive data appendices. The Economic Report of the President is transmitted to Congress no later than ten days after the submission of the Budget of the United States Government. Supplementary reports can be issued to the Congress which contain additional and/or revised recommendations. Documents are available as ASCII text and PDF files. Link

Congressional Budget Office. 2004. "Budget of the United States
Government: 2005." February. HTML, .pdf, Microsoft Excel format. Link

CAAR (Current Awareness in Aging Research) is a weekly email report produced by the Center for Demography of Health and Aging at the University of Wisconsin-Madison that helps researchers keep up to date with the latest developments in the field. For more information, including an archive of back issues and subscription information see Link

Harry (Rick) Moody edits TEACHING GERONTOLOGY, an electronic newsletter published by the Institute for Human Values in Aging in cooperation with Sage Publications. TEACHING GERONTOLOGY contains items of interest to improve the teaching of aging.  To submit items or request subscription changes, contact mailto:teachgero@yahoo.com . Back issues of the newsletter are available at http://www.hrmoody.com .

NOTE: Several journals and working paper series are available online only to subscribers. Others may be available online through full-text databases such as WilsonSelectPlus, JSTOR. Check to see if your college or university library is a subscriber.

2. The Graying of America and the World

Binstock, Robert H., Laura L. Carstensen, Dennis Carter, Carroll Estes, Mary Goldstein, James Jackson, Ronald D. Lee, Hazel Markus, Tom Rando, John Shoven, Timothy Smeeding, Gwendolynne Yeo, Doug Foster, and Robert B. Friedland. 2002. Aging in the 21st Century: Difficult Dialogues Program, Consensus Report. Stanford, CA: Institute for Women and Gender, Stanford University. Link

Cutler, David M. 2001. The Reduction in Disability among the Elderly. Proceedings of the National Academies of Science 98(12)(June): 6546-7. Link

Statistical Brief: Sixty-Five Plus in the United States. An overview of social and demographic characteristics of older people in America published in April 1996 as a Current Population Report, Special Studies, reference number P23-190, by the U.S. Census Bureau. Link

U.S. Bureau of the Census. The Older Population in the United States. March 2002. Link

Christine L. Himes. 2002. Elderly Americans. Population Bulletin 56(4). June. Washington, DC: Population Reference Bureau. Link

Preston, Samuel. 1996. American Longevity: Past, Present, and Future. Policy Brief No. 7. Syracuse, NY: Center for Policy Research, Syracuse University. Link

Kinsella, Kevin, and Victoria A. Velkoff. 2001. An Aging World: 2001. P95/01-1. Washington, DC: International Programs Center, Population Division, U.S. Bureau of the Census. Link

World Population at a Glance: 1998 and Beyond. International Brief IB/98-4. January 1999. Washington, DC: Economics and Statistics Administration, U.S. Bureau of the Census. Link

Lee, Ronald. 1997. Intergenerational Relations and the Elderly. In Kenneth W. Wachter and Caleb E. Finch, editors, Between Zeus and the
Salmon: The Biodemography of Longevity. Committee on Population, National Research Council. You can read this book online at the National Academies Press web site. Link

Manton, Kenneth G., Larry Corder, and Eric Stallard. 1997. Chronic Disability Trends in Elderly United States Populations: 1982-1994. Proceedings of the National Academies of Science 94(6) (March 18): 2593-2598. Link

National Academy on an Aging Society. 1999. Demography Is Not Destiny. Washington, DC: National Academy on an Aging Society. Link

Smeeding, Timothy M. 1999. Social Security Reform: Improving Benefit Adequacy and Economic Security for Women. Policy Brief 16. Syracuse, NY: Center for Policy Research, Syracuse University. November. Link

United Nations. 2002. World Population Ageing: 1950-2050. Link

3. The Economic Well-Being of Older Americans

Housing Vacancies and Home Ownership. Includes data on home ownership by age of householder. Washington, DC: U.S. Bureau of the Census. Link

Congressional Budget Office's publications about Social Security and Pensions. Link

U.S. Bureau of the Census. Educational Attainment in the United States. various years. Current Population Reports P20-493. Link

U.S. Bureau of the Census. Experimental Poverty Measures. various years. Link

U.S. Bureau of the Census. Money Income in the United States. various years. Link

U.S. Census Bureau. People 65 and Over by Ratio of Income to Poverty and State. Link

Smith, James. 1997. The Changing Economic Circumstances of the Elderly: Income, Wealth and Social Security. Policy Brief No. 8. Syracuse, NY: Center for Policy Research, Syracuse University. Link


4. Economics of Retirement and Old Age

U.S. Congress. House Committee on Ways and Means. Green Book: Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means. various years. Provides program descriptions and historical data on a wide variety of social and economic topics, including Social Security, employment, earnings, welfare, child support, health insurance, the elderly, families with children, poverty and taxation. It has become a standard reference work for those interested in the direction of social policy in the United States. It is compiled by the staff of the Committee on Ways and Means of the U.S. House of Representatives. GPO Access contains the Green Book 1996, 1998, and 2000) Link

5. Work and Retirement

AARP. 2003. Update On The Older Worker: 2002. Employment gains and losses in 2002 for workers over and under age 55, job displacement, job tenure, and age discrimination in employment are examined in this AARP Public Policy Institute Data Digest by Sara Rix. Publication ID: DD88. June. Link

AARP. 2003. How Will Recent Patterns of Earnings Inequality Affect Future Retirement Incomes? The increasingly unequal distribution of family income during the past three decades could affect the income of retirees over the next four decades. In this AARP Public Institute Issue Paper, Karen Smith of the Urban Institute uses the Dynamic Simulation Income Model (DYNASIM3) to analyze the impact of these income patterns. Publication ID: 2003-06. May. Link

AARP. 2003. Retirement Age and Social Security Reform: The Macroeconomic Effects of Working Longer. How Social Security benefits, the trust funds, compensation, income and savings would be affected if the labor force participation rate of older persons were to rise is explored in this AARP Public Policy Institute Issue Brief by Satyenda Verma and Sara E. Rix. (13 pages) publication ID: IB59. March. Link

IPC/95-2 Older Workers, Retirement, and Pensions. A Comparative International Chartbook by Kevin Kinsella and Yvonne J. Gist (12/95 , 93
pp.) Washington, DC: International Programs Center, Population Division, U.S. Bureau of the Census. Link

6. Retirement Policies and Pension Plans

The Pension Benefit Guaranty Corporation (PBGC) is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private-sector traditional pension plans known as defined benefit plans. PBGC protects the retirement incomes of nearly 44.3 million American workers in more than 31,000 private defined benefit pension plans. Its publications are available online at Link

AARP. 2002. Retirement Plan Coverage and Saving Trends of Baby Boomer Cohorts by Sex: Analysis of the 1989 and 1998 SCF. Recent changes in boomer pension and IRA coverage and personal saving levels are examined in this AARP Public Policy Institute Data Digest by Jules H. Lichtenstein and Ke Bin Wu. Based on 1989 and 1998 data from the Federal Reserve's Survey of Consumer Finances, the report focuses on differences between older and younger boomers as well as between women and men. Publication ID: DD93. November. Link

7. Social Security Benefits and Program Objectives: An Individual Perspective

Social Security Bulletin. Here

Social Security Administration. Calculate your own benefits. The calculators are designed to help you explore your potential benefit amounts using different retirement dates and different levels of potential future earnings. They will show your estimated retirement benefits as well as an estimate of disability and survivor benefit amounts on your record if you should become disabled or die today. Link

Social Security Administration. Statistical tables. Except as noted, these tables are published in the SSA's Annual Statistical Supplement to the Social Security Bulletin. Link

AARP. 2003. The Social Security Benefit Formula. A worker's Social Security benefits are generally based on his or her time and earnings in Social Security-covered employment and the age at which she or he leaves the labor force. Specifically, the initial benefit amount is reached through a two-step calculation. This AARP Public Policy Institute Fact Sheet by Laurel Beedon and Mitja Ng-Baumhackl describes the formula and illustrates the calculation using examples. Publication ID: FS59R. August. Link

Burkhauser, Richard V., and Timothy M. Smeeding. 1994. Social Security
Reform: A Budget Neutral Approach to Reducing Older Women's Disproportionate Risk of Poverty. Policy Brief No. 2. Syracuse, NY: Center for Policy Research, Syracuse University. Link


8. Social Security Financing and Reform Issues

American Academy of Actuaries. YOU FIX IT!! PLAY THE SOCIAL SECURITY GAME! Actuaries say that unless Social Security is fixed, the system may not be able to pay full benefits after 2037. Many solutions have been proposed, but no single approach is likely to succeed alone. Here's a game that lets you decide the trade-offs and construct a solution that rings the solvency bell. Below are the most-discussed reform options and their impact on solvency. Each option has pluses and minuses; place your cursor on SUPPORTERS SAY or OPPONENTS SAY for each side of the story. Remember that to solve the financial problem, you must create a reform package that totals at least 100 percent. Good luck! Link

Burkhauser, Richard V. 2003. Will the Social Security System Survive? Text and streaming video of September 2003 interview with Burkhauser. Available at Cornell University's CyberTower, http://cybertower.cornell.edu. Registration is required but free; you do not have to be affiliated with Cornell. After registration, click on "Forums" then choose the archived forum from September 2003.

Social Security Administration. The Future of Social Security. SSA Publication No. 05-10055, published January 4, 2004. Link

Social Security Administration. 2003. Technical Panel on Assumptions and Methods. Report to the Social Security Advisory Board. Washington, DC: Government Printing Office. October. The panel of expert actuaries, economists, and demographers appointed by the Social Security Advisory Board is charged with providing technical assistance to the Board by reviewing the assumptions specified by the Board of Trustees of the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund and the methods used by the Social Security actuaries to project the future financial status of the funds. Specifically, the Panel is asked to: review the assumptions regarding key demographic factors, including mortality, fertility, immigration, and disability incidence and termination; review the assumptions regarding key economic factors, including productivity, real wage growth, real net rates of return and variations in net rates of return (including equity returns), consumer price increases, labor force participation, and rates of employment and unemployment; review in particular the likely rate of labor force participation of older persons; review and assess the projection methodology; and review and assess the status of the recommendations of the 1999 Technical Panel. Link

Social Security Administration. 2003 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds. Issued March 17, 2003. Trustees Report tables containing 75-year projections show every fifth year. The report provides tables by single year for readers requiring more detail. In most cases, they provide separate tables for each of the 3 alternative sets of economic and demographic assumptions, and in many cases they also provide separate tables of historical data. Link

The independent, bipartisan Social Security Advisory Board examined many options that addressed Social Security's long-range solvency problem. Its July 2001 report is available at Link

Advisory Commission to Study the Consumer Price Index (aka The Boskin Commission). 1996. Toward A More Accurate Measure Of The Cost Of Living. Final Report to the Senate Finance Committee. Issued December 4. The Boskin Commission was appointed by the Senate Finance Committee to study the role of the CPI in government benefit programs and to make recommendations for any needed changes in the CPI. The Commission's December 1996 report recommended downward adjustments in the CPI of 1.1%. The CPI is the basis for Social Security COLAs and this recommendation, if adopted, would reduce future Social Security COLA increases, as well as impact numerous other government programs. Link

The 2001 President's Commission to Strengthen Social Security. Strengthening Social Security and Creating Personal Wealth for All Americans. Final Report, issued December 21, 2001. Link

9. Disability Policy

Jerry L. Mashaw and Virginia P. Reno, editors. 1996. Balancing Security and Opportunity: The Challenges of Disability Income Policy (Report of the Disability Policy Panel). Experts recommend reforms and offer insights on thorny issues in disability benefit policy: defining eligibility; links to rehabilitation and health care; wage subsidies; work incentives; and retirement age policy. Washington, DC: National Academy of Social Insurance. Link

Ticket to Work and Work Incentives Advisory Panel 2002. Advice Report to the Commissioner of Social Security: Statutory Requirement and Design Issues Related to SSDI $1 for $2 Benefit Offset Research. August. Washington, DC: Social Security Administration. Link

AARP. 2002. Before the Boom: Trends in Long-Term Supportive Services for Older Americans With Disabilities. Demographic, socioeconomic, market, and policy trends have changed the direction of long-term supportive services over the last couple of decades. In this AARP Public Policy Institute Issue Paper, Donald L. Redfoot and Sheel M. Pandya examine these trends and how they are likely to affect the demand for services between now and 2030 when the oldest Baby Boomers turn 85. Publication
ID: 2002-15. October. Link


10. The Financing and Delivery of Acute Health Care Services

Health and Aging. Information on trends in health and health care use by older Americans. Hyattsville, MD: National Center for Health Statistics, Centers for Disease Control and Prevention. Link

AARP. 2002. What Share of Beneficiaries' Total Health Care Costs Does Medicare Pay?
Total personal health care expenditures in 2000 for the Medicare population in the aggregate are projected in this AARP Public Policy Institute Data Digest by Craig Caplan, who identifies the sources of payment for these expenditures and examines how sources for elderly beneficiaries differ from those for younger beneficiaries with disabilities. Publication ID: DD78. September. Link

Barents Group. 1999. A Profile of QMB-Eligible and SLMB-Eligible Medicare Beneficiaries. Contract #500-95-0057/Task Order 2. Baltimore: Health Care Financing Administration. April 7. Link

Centers for Medicare and Medicaid Services. 2003. Annual Report of the Boards of Trustees of the Hospital Insurance and Supplementary Medical Insurance Trust Funds. [The 2001 report cited in the book is not available electronically.] Link

Committee on Nursing Home Regulation, Institute of Medicine. 1986. Improving the Quality of Care in Nursing Homes. Washington, DC: National Academy Press. Link

Crimmins, Eileen M. 2001. Americans Living Longer, Not Necessarily Healthier, Lives. Population Today 29(2)(February/March): 5-8. Link

General Accounting Office. 2000. Medicare Reform: Leading Proposals Lay Groundwork While Design Decisions Lie Ahead. Testimony of David M. Walker, Comptroller General of the United States, before the Committee on Finance, US Senate, February 24. Link

General Accounting Office. 2002. Long-Term Care: Aging Baby Boom Generation Will Increase Demand and Burden on Federal and State Budgets. Testimony of David M. Walker, Comptroller General of the United States, before the Special Committee on Aging, US Senate. Link

Gluck, Michael, and Kristina Hanson. 2001. Medicare Chartbook: Menlo Park, NJ: The Henry J. Kaiser Family Foundation. Fall. Link

Gold, Marsha, and Lori Achman. 2001. Trends in Premiums, Cost-Sharing, and Benefits in Medicare+Choice Health Plans, 1999-2001. Commonwealth Fund Issue Brief, Document #460. April. Link

Gold, Marsha, and Jessica Mittler. 2001. The Structure of Supplemental Insurance for Medicare Beneficiaries. Operational Insights No. 3, June. Washington, DC: Mathematica Policy Research, Inc. Link

Hagen, Stuart. 1999. Projections of Expenditures for Long-Term Care Services for the Elderly. Washington, DC: Congressional Budget Office. Link

11. Additional Health Issues: Long-Term Care

AARP. 2002. Across the States 2002: Profiles of Long-Term Care Systems. A snapshot of the long-term care landscape in every state and the District of Columbia by Steven R. Gregory and Mary Jo Gibson of AARP's Public Policy Institute. Using the most recent data sources available, the chartbook's 2002 edition provides information, including state rankings and maps, on 70 indicators that are otherwise difficult to obtain from a single source. Publication ID: D17794. December. Link

Department of Health and Human Services. Office of Disability, Aging, and Long-Term Care Policy. Office of the Assistant Secretary for Planning and Evaluation. The Office of Disability, Aging and Long-Term Care Policy (DALTCP) is charged with developing, analyzing, evaluating and coordinating HHS policies and programs which support the independence, productivity, health and long-term care needs of children, working age adults and older persons with disabilities. Link


Robert L. Clark Link
Richard V. Burkhauser Link
Marilyn Moon
Joseph F. Quinn Link
Timothy M. Smeeding. Link

Current Awareness in Aging Research (CAAR) Report is a weekly email report produced by the Center for Demography of Health and Aging at the University of Wisconsin-Madison that helps researchers keep up to date with the latest developments in the field. For more information, including an archive of back issues and subscription information see: Link


Syllabi of Courses on Demography, Economics and Epidemiology of Aging.

This electronic catalog of more than 30 syllabi is hosted by the University of Michigan Center on the Demography of Aging, one of nine such centers funded by the National Institute on Aging (NIA). It was originally compiled by Vicki Freedman of RAND and sponsored by the NIA Office of Demography and Population Epidemiology. http://agingmeta.psc.isr.umich.edu/syllabi/ . If you would like to add your syllabus to this catalog, please contact nia-demog-centers@umich.edu

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