The Untied State aging society will considerably be higher in the coming few years when the post war baby boomers are retiring. This will place a significant additional burden on the income security spending of the U.S. government and bring new challenges to existing economic policies. This paper analyses the impact of increasing aging population on the macroeconomic variables in the labor market, government spending, and fiscal policy of the United States economy.
Introduction The United State economy is now facing a new demographic composition of increasing high aging population because of baby boomers (76 million babies born between 1946 through 1964), better life expectancy, and low birth rate (How Will Boomers Affect …show more content…
The aging of the U.S. population will bring some benefits to the nation’s economy. The main benefits of having an aging population are contributions to community services and low crime rate (Chowdhury, n.d.). As the life expectancy increased, the population retired with good health condition will also increase. Having relatively healthy retirees will contribute to the economy positively by participating in volunteer activities, child care, and various home services. On the other hand, having aged population can reduce the crime rate. As a general rule, it is likely that older communities will become more law abiding, since older people are less inclined to commit crimes (Chowdhury, n.d.).
The major disadvantages of the aging population are the decline in workforce participation, the increasing burden of disability, and ill health. As the population aging, the size of the workforce shrinks. On the other hand, as the population becomes aged, the cost of health insurance, medical and disability benefit would also be higher.
Aging Population and Labor …show more content…
In 2009, income security expenditure constitutes 47 percent of the U.S. GDP and 44 percent of the income security expenditures were spent for Social Security and 28 percent was for Medicare (Tucker, 2011). As the population age increased, it is clear that the Social Security claims would increase and the need for Medicare as well. This trend would be continuing as more of the baby boomers are retiring. According to the Social Security Administration, in 1950, 8 percent of the total population was aged 65 or older. “That share was 12 percent in 2005 and is projected to reach 23 percent by 2080. At the same time, the working-age population will have shrunk, from 60 percent in 2005 to 54 percent in 2080” (Reznik, 2005/2006). As a result, under the current law, Social Security will soon begin to increase than the program’s income (Board of Trustees 2006, 16). Therefore, the aging population in the U.S. will bring a substantial increase in the government expenditure of income security over the coming
Introduction The United State economy is now facing a new demographic composition of increasing high aging population because of baby boomers (76 million babies born between 1946 through 1964), better life expectancy, and low birth rate (How Will Boomers Affect …show more content…
The aging of the U.S. population will bring some benefits to the nation’s economy. The main benefits of having an aging population are contributions to community services and low crime rate (Chowdhury, n.d.). As the life expectancy increased, the population retired with good health condition will also increase. Having relatively healthy retirees will contribute to the economy positively by participating in volunteer activities, child care, and various home services. On the other hand, having aged population can reduce the crime rate. As a general rule, it is likely that older communities will become more law abiding, since older people are less inclined to commit crimes (Chowdhury, n.d.).
The major disadvantages of the aging population are the decline in workforce participation, the increasing burden of disability, and ill health. As the population aging, the size of the workforce shrinks. On the other hand, as the population becomes aged, the cost of health insurance, medical and disability benefit would also be higher.
Aging Population and Labor …show more content…
In 2009, income security expenditure constitutes 47 percent of the U.S. GDP and 44 percent of the income security expenditures were spent for Social Security and 28 percent was for Medicare (Tucker, 2011). As the population age increased, it is clear that the Social Security claims would increase and the need for Medicare as well. This trend would be continuing as more of the baby boomers are retiring. According to the Social Security Administration, in 1950, 8 percent of the total population was aged 65 or older. “That share was 12 percent in 2005 and is projected to reach 23 percent by 2080. At the same time, the working-age population will have shrunk, from 60 percent in 2005 to 54 percent in 2080” (Reznik, 2005/2006). As a result, under the current law, Social Security will soon begin to increase than the program’s income (Board of Trustees 2006, 16). Therefore, the aging population in the U.S. will bring a substantial increase in the government expenditure of income security over the coming