The Aging Population in the United States and Its Effect on Our Economy

2121 Words Oct 5th, 2010 9 Pages
Managerial Economics ORG 342

The Aging Population in the United States and its Effect on our Economy

July 20, 2010

Aging Population 1

The population in the United States is aging at an unprecedented pace. For the first time in history, seventy percent of everyone who has ever lived is alive today (Isidro, 2009). The aging population and their imminent retirement will place an even greater strain on the country’s financial resources. The baby boomers; people born between 1946 and 1964 have influenced our economy by their sheer number. As this age group matures and enters their retirement years, an economic shift is inevitable. Not only will changes be seen in government programs such as social security, Medicare, and
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Major government transfer programs such as Social Security, Medicare, and Medicaid disproportionately benefit the elderly, while expenditures on public education disproportionately benefit the young. With the trend of our population entering the older age group, even more funds will be allocated to the elderly. With the younger generation being fewer in number, the government consumption in public education
Aging Population 4 will be reduced, somewhat off setting the rising expenses for the older age group. Unfortunately the decrease in the number of school age children will be much less than the increasing numbers of people reaching retirement age, so the transfer of funds may be insignificant.
In 1986, The Center for Mature Consumer Studies was established for the purpose of understanding the consumption behavior of the aging population. Its mission is to generate and disseminate information that can help organizations improve the efficiency of their marketing activities and enhance the well being of older adults (Brock, 2010). Once portrayed as unhealthy and unproductive, this generation is now being seen as contributors and a viable consumer group.
This large group of people has determined the size and age composition of the labor force for over 30 years. As this group ages, the age of the labor force increases; this will have an impact on the economy. The number of people
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