American Standards of Living:1918-1988
1. Frank Levy, Dollars and Dreams, New
York:W. W. Norton, 1988, documents how the slower income and productivity
growth, combined with demographic trends, has changed the American
income distribution. Overall, the position of the elderly has improved,
the position of children has deteriorat-ed, and sons face a lower
earnings profile than their fathers. Paul Krugman, The Age of
Diminished Expectations, Cambridge: MIT Press, 1990, explores
the macroeconomic foundations of the decline in income and productivity
growth and the role that United States economic policy played.
2. Funeral expenses and occupational expenses are also included
in miscellaneous. Over the years, these two categories declined
substantially in their importance. On the theoretical development
of transactions costs, see Oliver Williamson, The Economic Institutions
of Capitalism. New York: Free Press, 1985.
3. David M. Cutler and Lawrence F. Katz in "Rising Inequality?
Changes in the Distribution of Income and consumption in the 1980s,"
paper presented to the AEA meetings, January 1992, present data
that shows the lowest quintile in the family income distri-bution
had a higher share of consumption in 1973 than in 1960 or during
the 1980s and that their share of consumption continued to fall
during the 1980s, largely as a result of their relative increase
in family size. Cutler and Katz also estimated the 1989 poverty
rates based on consumption were 18% for children under 18 years
old and 5% for seniors (over 65 years old).
4. This and the following data on life expectancy and death rates
are form Historical Statistics and Statistical Abstract of the
United States, various issues. Death rates should be used with
caution since they are not adjusted for comparability.
5. Employed families met basics in medical care provided they had
a major medical health insurance policy sponsored by their employer.
6. J. K. Galbraith, The Affluent Society. 4th edition,
Boston: Houghton Mifflin, 1984.
7. See, for example, Newman, Declining fortunes (1993).
8. Congress of the United States, Congressional Budget Office,
Baby Boomers in Retirement: An Early Perspective, Washington,
D.C., 1993. The parents of the baby boomers are defined to be people
aged 55 to 74 in 1989. Two notable exceptions to the average improvement
in the economic situation of the baby boomers are those without
a high school degree and those who are unmarried with children.
In general, the financial position of the older baby boomers, those
born before 1955, was even more improved than that of the younger
boomers born after 1995. However, real wealth of the older boomers
who are not homeowners fell.
9. One of every four boomers had completed four years of college
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