Abstract
The challenges posed by the aging of the U.S. population for business and public policy are vast. They are amplified particularly by:• Slow increase of incomes—and therefore low private savings—for those at the bottom of the pay distribution.• Cutbacks in employee health-care insurance and defined benefit pension plans.• Unsustainability of Social Security and Medicare as currently configured.This paper spells out these challenges and discusses how they can be addressed. Of particular importance are some combination of enhanced revenue and reduced expenditure for Social Security and Medicare, the shift of private pension plans from defined benefit to defined contribution, the need to consider later retirement ages, and the need for improved personal financial literacy.
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References
Moore, James and Olivia S. Mitchell . 2000. “Projected retirement wealth and saving adequacy.” In Forecasting Retirement Needs and Retirement Wealth, edited by O.S. Mitchell, B. Hammond and A. Rappaport. University of Pennsylvania Press, 68–94.
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This is a revised version of a presentation for the NBER Panel on Economic Implications of Demographic Change at the NABE Annual Meeting, October 11, 2015.
*Mitchell is the International Foundation of Employee Benefit Plans Professor at the Wharton School, as well as Professor of Insurance/Risk Management and Business Economics/Policy; Executive Director of the Pension Research Council; and Director of the Boettner Center on Pensions and Retirement Research; at the Wharton School of the University of Pennsylvania. She also serves as a Research Associate at the NBER. She received the MA and Ph.D. degrees in Economics from the University of Wisconsin-Madison, and the BA in Economics from Harvard University. She has published over 200 books and articles, and she speaks Spanish and Portuguese, having lived and worked in Latin America, Europe, and Australasia.
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Mitchell, O. Public and Private Challenges of an Aging U.S. Population. Bus Econ 51, 8–10 (2016). https://doi.org/10.1057/be.2016.6
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DOI: https://doi.org/10.1057/be.2016.6