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Coping with the Demographic Challenge: Fewer Children and Living Longer
Summary
Due to demographic changes, the U.S. Social Security system will face financial challenges in the near future. Declining fertility rates and increasing life expectancies are causing the U.S. population to age. Today 12 percent of the total population is aged 65 or older, but by 2080, it will be 23 percent. At the same time, the working-age population is shrinking from 60 percent today to a projected 54 percent in 2080. Consequently, the Social Security system is experiencing a declining worker-to-beneficiary ratio, which will fall from 3.3 in 2005 to 2.1 in 2040 (the year in which the Social Security trust fund is projected to be exhausted). This presents a significant challenge to policymakers.
One policy option that could help keep the Social Security system solvent is to reduce retirement benefits, either by raising the normal retirement age or through life expectancy indexing, to reflect the fact that people are living longer. However, these reductions in benefits have the potential to harm economically vulnerable retirees. Other options, such as progressive price indexing proposals, explicitly protect the retirement benefits of low lifetime earners. Still other options would seek to raise additional revenue for the system.
Since individuals will be living longer in retirement, many policymakers believe it is important to encourage older workers to delay retirement so that they can maintain a quality standard of living throughout their retirement. One proposal to encourage continued work would be to increase the early eligibility age for Social Security benefits from age 62 to age 65. This could possibly hurt individuals who need to retire from physically demanding jobs but would ensure that people receive higher benefit amounts once they were able to fully retire.
Other proposals that could promote more work at older ages include expanding phased retirement options and reforming pension and defined contribution systems to create incentives to work and save.
Introduction
Americans are living longer and are having fewer children. Together these factors result in the aging of the U.S. population and a subsequent strain on the Social Security system. This demographic challenge has been recognized by policy analysts as well as policymakers. President Bush, in his 2005 State of the Union Address (White House 2005), highlighted this problem, saying:
In today's world, people are living longer and, therefore, drawing benefits longer. And those benefits are scheduled to rise dramatically over the next few decades. And instead of sixteen workers paying in for every beneficiary, right now it's only about three workers. And over the next few decades that number will fall to just two workers per beneficiary. With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees.
This article describes policy implications and some potential policy solutions to this demographic challenge. It first provides context for the policy discussion by examining fertility, mortality, work, and retirement patterns in the United States and then discusses different policy options.
Background
As in many countries, the population in the United States is graying. Table 1 shows how the elderly population has increased over time and how it is projected to grow in the future. 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. The elderly population will have more than doubled as a percentage of the total population in just over 100 years. At the same time, the working-age population will have shrunk, from 60 percent in 2005 to 54 percent in 2080.
Who is dismissing the idea that there are 94 million not in the labor force? The question is whether there is any reason to be concerned. And for the most part, there is not as 93% say they don't want a job. Very, very few, less than a million, have "given up," but many want us to believe all 94 million have dropped out and have given up.this whole thread is a case-study in how Progressives delude themselves. The OP and other Progs here are trying to dimsiss the idea that 94 million arent participating in the Labor Market by "proving" their point by explaining the reasons for the number being what it is.
Well, of course some people are. Who has denied that? And when has that ever not been true?Right...that's what makes them part of the 94 million.Being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week.
Now get out there and WORK.
1. high school students arent generally counted as part of the work force
Same as always, some work, some don't. I didn't work my first two years of college.2. how are college students able to survive without working where in the past they often worked their way through college?
But there are more elderly than ever. That leads to a downward push on the labor force participation rate. Would you like the math?3. senior citizens are more than ever choosing to REMAIN in the Labor Market; meaning you have to ADD THOSE BACK INTO the calculations. thanks for nothing idiot
yes loon that puts some pressure on the LFPR; but it also lessens the impact of retirees. stop lying to yourself
Because in many cases, the costs of working (day care, gas, meals) outweigh the pay. If you're making low wages, you're better off not working than working.4. how are stay-at home parents able to stay at home now when that was a disappearing trend dummy??
^^^ but that is exactly the point of the other side nutjob; that obama and progressive policies have made it easier not to work, AND THAT THE NUMBERS PROVE THAT.
of course we have.5. have we never had jo training participants?
A lot of it is because the job prospects aren't so good and disability is preferable.6. RECORD numbers are collecting a federal disability NOT RELATED to military service. why is that??
SO YOU'RE ADMITTING PEOPLE ARE GOING ON DISABILITY RATHER THAN WORKING??????
the other side of what?AGAIN THAT WAS A POINT, IS A POINT BEING MADE BY THE OTHER SIDE.
Lololol no it's not.Yer dumb. We really have 5% UE rate and the economy is the best it ever has been.... It just feels to everyone like the opposite because FoX newz said so.
Being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week.
Now get out there and WORK.
Being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week.
Now get out there and WORK.
1. high school students arent generally counted as part of the work force
2. how are college students able to survive without working where in the past they often worked their way through college?
3. senior citizens are more than ever choosing to REMAIN in the Labor Market; meaning you have to ADD THOSE BACK INTO the calculations. thanks for nothing idiot
4. how are stay-at home parents able to stay at home now when that was a disappearing trend dummy??
5. have we never had jo training participants?
6. RECORD numbers are collecting a federal disability NOT RELATED to military service. why is that??
Being a high school, college or graduate student, a senior citizen, a stay-at-home parent, a job-training participant, or having a disability is no excuse for not holding down a job, or for working less than 40 hours in a week.
Now get out there and WORK.
I'm halfway through a Doctoral program, and work a full time job, about 70 hours a week.
maybe the RW's haven't noticed, but NONE of the GOP candidates are currently using this 94 million number as a tool to be elected .. the only one (Trump that even came close) has been debunked as a mistruth..
hint hint ..
I retired before 50... not looking for work ... I'm guilty as charged.
LOL
maybe the RW's haven't noticed, but NONE of the GOP candidates are currently using this 94 million number as a tool to be elected .. the only one (Trump that even came close) has been debunked as a mistruth..
hint hint ..
maybe you havent noticed one of your very own left-wing nutjobs ON THE THREAD RIGHT NOW is using the number, but explains it away?
comical how you want to try to ridicule people when you are more clueless than anybody idiot
11 lol
maybe the RW's haven't noticed, but NONE of the GOP candidates are currently using this 94 million number as a tool to be elected .. the only one (Trump that even came close) has been debunked as a mistruth..
hint hint ..
maybe you havent noticed one of your very own left-wing nutjobs ON THE THREAD RIGHT NOW is using the number, but explains it away?
comical how you want to try to ridicule people when you are more clueless than anybody idiot
11 lol
so which one of those left wing nut jobs on this thread are running for President?
try and keep up ... Goober.
is this close enough leftard? it isnt trump.
Ted Cruz says 92 million Americans aren't working | PolitiFact
www.politifact.com/.../ted-cruz-says-92-million-americans...
PolitiFact.com
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Feb 10, 2015 - But we wondered whether Cruz was right that "92 million Americans aren't working. ... for 57.5 million Americans -- or more than three-fifths of the number Cruz cited. ... range (25 to 64) isn't working doesn't mean that they are unemployed. ... items · Subscribe to our RSS feeds on GOP Pledge-O-Meter items ...
