Abstract:

Improvements in the living standards of the elderly over the past 25 years have been dramatic . The rising affluence of the elderly has prompted a debate over what constitutes an equitable distribution of resources between generations. The purpose of this essay is to review the evidence on the changing well-being of the elderly in the United States. While successive cohorts of elderly have attained higher levels of economic well-being, a review of the longitudinal evidence also shows that some elderly individuals, especially women and the chronically ill, remain economically vulnerable as they age. Whether Social Security and other public expenditures that benefit the elderly are equitable is a key issue in the debate over whether the economic position of the elderly is "fair". We present two frameworks, a "pay-as-you-go" model and a pension model, within which equity issues are discussed. The central role played by health concerns in assessing the weU:being of the elderly leads us also to review evidence on two important health issues: recent trends in the physical frailty of the elderly, and the likely burdens, both to the elderly themselves and to society at large, of providing medical care for future cohorts of elderly.