Boomer Bust?: Economic and Political Issues of the Graying Society (2 Volumes)

Boomer Bust?

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Boomer Bust? Economic and Political Issues of the Graying Society

PERSPECTIVES ON THE BOOMERS VOLUME 1

Edited by

Robert B. Hudson

Praeger Perspectives ,

Library of Congress Cataloging-in-Publication Data Boomer bust? : economic and political issues of the graying society / edited by Robert B. Hudson. p. cm. Includes bibliographical references and index. ISBN 978-0-275-99549-2 (set : alk. paper) — ISBN 978-0-275-99551-5 (vol. 1 : alk. paper) — ISBN 978-0-275-99553-9 (vol. 2 : alk. paper) 1. Population aging—United States. 2. Baby boom generation— Retirement—United States. 3. United States—Population—Economic aspects. I. Hudson, Robert B., 1944– HQ1064.U5B66 2009 2008024968 306.30 808440973—dc22 British Library Cataloguing in Publication Data is available. Copyright © 2009 by Robert B. Hudson All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2008024968 ISBN: 978-0-275-99549-2 (set) 978-0-275-99551-5 (vol. 1) 978-0-275-99553-9 (vol. 2) First published in 2009 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10

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Contents

Preface

vii Robert B. Hudson I. Demographic and Social Profile

1.

The Baby Boom Age Wave: Population Success or Tsunami? Greg O’Neill

2.

Boomer Diversity and Well-Being: Race, Ethnicity, and Gender Jan E. Mutchler and Jeffrey Burr

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3.

A History of Productive Aging and the Boomers W. Andrew Achenbaum

47

II.

3

Boomers and the New Economics of Aging

4.

The Boomers and Their Economic Prospects Karen C. Holden

63

5.

Will the Boomers Revolutionize Work and Retirement? Sara E. Rix

77

6.

The Looming Economics of Boomer Health Care Christine Bishop

95

III.

Boomers and the New Politics of Aging

7.

Public Policy and the Boomers: An Expanding Scope of Conflict Robert B. Hudson

113

8.

The Boomers in Politics: Impact and Consequences Robert H. Binstock

135

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9.

Contents

Aging Boomers, Generational Equity, and the Framing of the Debate over Social Security John B. Williamson and Diane M. Watts-Roy

153

IV. Boomers and Public Policy 10.

Population Aging, Entitlement Growth, and the Economy John Gist

173

11.

Private Pensions and the Boomers: How Much Is Enough? Jack L. VanDerhei and Craig Copeland

197

12.

Medicare in the Image of the Baby-Boom Generation Edward F. Lawlor

215

13.

Long-Term Care Policy as an Investment in Baby Boomers and Future Generations Michelle Putnam

227

Differential Treatment by Age: Age Discrimination or Age Affirmation? John Macnicol

241

Aging Policy as Family Policy: Expanding Family Leave and Improving Flexible Work Policies Steven K. Wisensale

253

14.

15.

About the Editor and Contributors

271

Index

277

Preface

H

aving grown from infancy through adolescence to adulthood, 76 million baby boomers are now about to enter old age. In the course of their lifetimes, the boomers have forced double shifts in elementary schools, generated an enormous growth in higher education, created new consumer markets, and enjoyed historically unprecedented levels of prosperity. Having massively impacted every social institution they have encountered thus far, the boomers are widely expected to revolutionize old age as well. The two volumes that comprise Boomer Bust? Economic and Political Issues of the Graying Society examine in great detail what the boomers will look like in old age, how they are likely to behave, and the impact they may have on the larger society. There is no question that the boomers will comprise the largest cohort of older Americans ever, but beyond numbers alone there are many unknowns about the actual effect they may have (or be associated with or blamed for). Because of their very size, the boomers may displace or replace other age groups in various roles (workers, consumers, caregivers, voters, Social Security recipients), but questions remain about how singularly they will behave and how salient their generational impact will be. Despite their iconic demographic standing, the boomers by no means all look the same, and equally important, they also very much resemble people from other generations in obvious ways. Boomers and nonboomers alike are male or female, black or white, rich or poor, urban or rural, healthy or ill. In short, the world of the boomers is marked both by intracohort differences and intercohort similarities. These interrelated attributes—cohort size, cohesion, and distinctiveness— are central to any discussion about the impact the boomers are likely to have on American life. A number of critical questions flowing logically from this formulation are addressed in the chapters that follow:

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• How singularly will the boomers behave in old age? • How different will they be from older and younger people? • How important will their age (the effect of how old they are) and their generation (the effect of when they were born) be in affecting their late-life behavior? • Will there be just one boomer cohort or a ‘‘first wave’’ and a ‘‘second wave’’? • Will younger generations resent the size and standing of older boomers? • Will boomers be a healthier older cohort even though they are living longer? • Does the rise of ‘‘productive aging’’ mean that elders will become net contributors to the social and economic resource base or will they continue to be draws on it? • How many older boomers will be care recipients, care providers, or both? • Will older boomers work longer, or will they enjoy longer retirement, or both? • Can boomers save and invest enough for a decent retirement? • Will the boomers contribute to or hinder future economic growth? • Will older boomers be ‘‘the most powerful lobby in Washington’’?

How the larger society and the boomers themselves understand their needs, contributions, and standing will very much affect how the nation responds to the boomers’ imposing presence. The boomers in old age will represent complete realization of the institutional standing older people have come to assume in American life over the past half-century. No longer a marginal presence, seniors today (and certainly tomorrow) are demanding and receiving recognition of their new prominence. A range of societal institutions are being forced to accommodate older people’s new preferences and concerns. Employers are wrestling with a rising need to retain older workers after years of easing them out the door; families are struggling with growing ‘‘work/family’’ pressures as older relatives require care and attention in unprecedented numbers; communities are realizing that long-established housing and transportation patterns (many generated by the boomers earlier in life) are not congruent with the needs and preferences of older residents; and government is confronted with the costs associated with pension and health care policies that are expected to grow at what many consider to be an alarming rate. How society will respond to the boomers in old age raises a host of additional questions: • Will there be a labor shortage when boomers retire, and how will society respond? • How willing are employers to retain and recruit older workers? • Under what circumstances will the boomers be willing to work in late life? • How will erosion of retired employee health care insurance affect late-life work? • Can Social Security survive the boomers in retirement? • Can increases in health care expenditures be contained as the boomers age? • Will older boomers be the victims of age discrimination, or will they be the beneficiaries of age affirmation?

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• Can communities modify transportation and housing policies to accommodate the needs and desires of aging boomers? • Will there be a geriatric labor force in place able to meet the needs of very old boomers? • How will families adjust to the combination of more older relatives, fewer children, and more adult members in the labor force?

The separate volumes of Boomer Bust? examine these questions from two overarching perspectives. Volume 1 takes a ‘‘macro view,’’ assessing the presence of the boomers from a societal perspective. How may the boomers impact society, and how is society likely to respond? What are the critical demographic, economic, political, and policy considerations to be kept in mind? Volume 2 is directed more to the boomers themselves. How should they think about extended work lives, retirement, and retirement planning? What other roles are there for them, and how can they contribute through civic engagement, volunteering, late-life learning, and working intergenerationally? How will older boomers get around, adapt to new or existing communities, and be cared for when health care needs arise? The chapters in volume 1, part 1, examine the boomer population as the imposing demographic phenomenon it will be. Chapter 1 previews the older boomers in broad brush, addressing a series of ‘‘frequently asked questions’’ about how big an impact the boomers will have. Chapter 2 sets forth the vast diversity to be found among the boomer population, making it hard to reach unconditional conclusions about their overall well-being and noting that many older boomers will continue to be in dire circumstances. Chapter 3 highlights the improvements that have been made in elders’ well-being in recent decades and introduces the truly modern concept of ‘‘productive aging.’’ Part 2 assesses the likely economic effects of the boomers in old age. Chapter 4 emphasizes the relative prosperity of the boomers in their early years, the emergence of ‘‘leading-edge’’ and ‘‘trailing-edge’’ boomer subcohorts with different economic histories, and what will be required for boomers to assure themselves adequate income in retirement. Chapter 5 explores how different the labor market participation of boomers will be from current older adults, concluding that the changes are not likely to be as dramatic as many foretell and that men’s and women’s work trajectories may follow somewhat different paths. Chapter 6 reviews the impact aging boomers will have on the health care system and, in turn, how boomers must expect to deal with ever-rising health care costs. Importantly, the aging of the population—soon to be associated with the boomers—is not the principal factor of health cost increases, technology and reimbursement being bigger drivers. Part 3 of volume 1 examines the boomers in the context of politics, government, and public policy. Chapter 7 reviews the dramatic increase in public-sector policies and expenditures on behalf of the aged, examines factors accounting for these increases, and suggests that the size of the boomer

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cohort in the face of spending pressures on the big entitlement programs have the makings of a political ‘‘perfect storm.’’ Chapter 8 investigates the political attitudes and behaviors of older voters, projects these patterns onto how the boomers may behave in coming decades, and concludes that the boomers, numerically important as they may be as voters and constituents, will not constitute a solid voting block concerned with only a narrow political agenda. Chapter 9 assesses the ‘‘intergenerational equity’’ debate in which older and younger generations are said to be pitted one against the other, concluding that the evidence of that friction is weak, although the desire for some actors to continuing framing the debate in those terms is strong. Part 4 contains a series of chapters addressing public policies directed to older Americans. Beyond providing important information about these programs’ aims, successes, and shortcomings, each of the chapters renders judgment on how the boomers will affect these programs’ workings and how well suited they may prove to be in meeting the diverse needs of the boomers. Chapter 10 provides an exhaustive review of so-called entitlement spending directed toward seniors, addressing the question of whether the nation can continue to afford these programs given how expensive they are becoming. The chapter juxtaposes aging-related spending against other large expenditure categories, uses the size and growth of the gross domestic product as a benchmark against which to assess old-age spending, and concludes that a series of tax, savings, and expenditure reforms can make these programs sustainable in the long run (Medicare and overall health care spending being the most challenging). Chapter 11 provides an overview of private pensions and uses different economic models to forecast how well they will help meet retirement needs of the boomers. Divergent patterns of coverage and contributions yield mixed conclusions, but the authors express guarded optimism that reforms enacted in 2006 will lead to more widespread participation and higher benefits. Chapter 12 calls for a fundamental rethinking of Medicare’s current approach to old-age health concerns. Historically directed at acute care illness and associated overwhelmingly with hospitals and physicians, Medicare must be reworked to better recognize the shifting health profile of contemporary elders, specifically, to better cover long-term care, mental health care, and disease management. Chapter 13 turns attention directly to long-term care, a policy arena where public policy has not been nearly as extensive as those addressing income security and acute health care. Beyond elevating the place of long-term care in public policy, the author urges that the existing paradigm be modified to better recognize consumer preferences, lifelong rather than late-life-only disabilities, and the role of both high- and low-tech innovations. Chapter 14 explores the intriguing question of how well and how appropriately age discrimination legislation protects older people. Should the aged be legally protected against discrimination in a manner analogous to people

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of color and women? Does such legislation give older people needed protections or special privileges? Advanced age has historically been used as a proxy for demonstrable need, and this chapter raises the question of whether that—unmodified—should continue to be the case or some reassessment is called for. The volume’s final chapter examines family leave policy and what programmatic changes may be in order to better meet the needs of individuals wearing both worker and caregiver hats. It also reviews employer policies and the contributions and limitations of what the private sector is doing to promote work/family balance. The contributors to both volumes come from a rich array of academic, research, foundation, and frontline organizations involved with investigating and improving the lives of seniors. I am indebted to each of these contributors for their care and diligence in preparing these chapters and, in particular, for directing their attention to the older boomer question. Because most boomers are not yet old, this task is not as straightforward as it might first appear. Through modeling, extrapolation, and historical and longitudinal investigation, these authors have succeeded in giving informed and nuanced appraisals of how the boomers may fare in tomorrow’s economic and political worlds and how those worlds may experience them, the largest old-age population in history. Among many others, I would like to thank my colleague Judith Gonyea for the clarity of her conceptual thinking around the project’s overall organization and Jeff Olson from Praeger Publishers, who shepherded these materials through the labyrinthian approval and production process. As always, thanks to my wife Perry (who believes rounding up academics is like herding cats) and my stepson Tim (who thinks none of us works hard enough).

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I DEMOGRAPHIC AND SOCIAL PROFILE

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1

The Baby Boom Age Wave: Population Success or Tsunami? GREG O’NEILL

THE SILVER TSUNAMI In 2008, the first wave of the baby-boom generation—the 77 million Americans born between 1946 and 1964—will turn 62 and become eligible for Social Security benefits. Just three years later, they’ll be eligible for Medicare benefits. By 2030, the entire cohort will have reached age 65 and one in five Americans will be 65 or over, compared to about one in eight today. The aging of the baby-boom generation is often seen as a ‘‘crisis,’’ with headlines warning that boomers will ‘‘bankrupt’’ Social Security and Medicare, shrink the size of the labor force, and trigger a stock market ‘‘meltdown’’ (Kosterlitz and Serafini 2005). Books with apocalyptic titles like Gray Dawn and The Coming Generational Storm have used the specter of population aging as a justification for major structural changes to the nation’s old-age entitlement programs (Schulz and Binstock 2006). In 2007, David Walker, head of the Government Accountability Office (GAO)—Congress’s nonpartisan watchdog agency—testified that the ‘‘demographic tidal wave . . . represented by the retirement of the baby-boom generation’’ had the potential to create a ‘‘tsunami of spending that could swamp our ship of state’’ (Greenblatt 2007). This chapter will review some of the most popular ‘‘doom and gloom’’ arguments typically expressed in the media and public policy debates. It also will present counterarguments—drawing from the academic and public policy literature—that offer a more nuanced and optimistic view of both the challenges and opportunities of an aging society.

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PERSPECTIVES ON THE BOOMERS

BOOMERS AND THE GRAYING OF THE POPULATION The United States has an aging population. Between 1960—when the baby boom was still under way—and 2030, the share of the population age 65 or older will more than double (from 9 percent to 20 percent). This has led commentators to describe the future United States as ‘‘a nation of Floridas’’— since about one in five Floridians today is over 65. Although current anxiety over the ‘‘graying of the population’’ is often discussed as though it were associated solely with the impending retirement of the baby-boom generation, the American population was aging long before the boomers came along and will continue to age even after the youngest boomer has passed away. The population is growing older as a result of two long-term demographic trends: women are having fewer children and people are living longer. In the United States, the total fertility rate—defined as the average number of children born to each woman—had been declining steadily for nearly two hundred years when suddenly, in the mid-twentieth century, it went up and stayed up for almost two decades. But the postwar ‘‘baby boom’’ was a temporary phenomenon. By the mid-1960s, birthrates reverted back to historical trends, dropping sharply from 3.7 children per woman at the height of the boom in 1957 to a historic low of 1.7 children by the mid-1970s. The rate has since recovered to 2.1 children per woman—or what is commonly called the replacement rate—but the drop in the fertility rate relative to the baby-boom period is pushing up the average age of the population (Munnell 2004). The other factor behind the demographic transformation is increasing life expectancy. Better medical care and healthier lifestyles mean that people live much longer than they did fifty years ago. And, as people live longer, the proportion of the population at older ages becomes larger. In the United States, life expectancy at birth was 69.7 years in 1960. By 2004, it had moved up more than eight years to 77.9 years. Moreover, life expectancy in 1960 for those age 65 was about thirteen years for men and fourteen years for women. By 2004, it had risen to almost seventeen years for men and nineteen years for women. The aging of the baby-boom generation, increased life expectancy, and fertility rates at about the replacement level are expected to significantly increase the elderly dependency ratio—the estimated number of people age 65 and over compared to the working-age population, ages 15 to 64. There were more than seven workers for every retiree in 1950, but now there are only about five workers per retiree—and that is projected to decline to three by 2030 (GAO 2005). There is no evidence that these trends will reverse in the near future. Experts are not expecting any significant increase in the birthrate or a change in the trend toward longer life (Munnell 2004). The U.S. Census

The Baby Boom Age Wave

5

Bureau projects that life expectancy will increase over the next several decades, that about one in every nine baby boomers (or nine million boomers) will survive into his or her late 90s, and that three million boomers will reach 100 (Sonnega 2006). Furthermore, there is widespread agreement among researchers that current and projected levels of immigration—around a million net immigrants per year—are not nearly large enough to offset the aging of the U.S. population. Although immigration makes the population larger, differences between the average age and fertility rates of immigrants and natives do not significantly affect the overall age composition of the population, because immigrants make up a relatively small percentage of the total population (Camarota 2007; United Nations 2001). Thus, studies show that it would require almost four million additional immigrants every year through 2025 to maintain the elderly dependency ratio at the year-2000 level. But experts agree that such a large increase in the gross immigration quota seems unrealistic from a social and political standpoint (Lee and Haaga 2002). ‘‘ONE EVERY EIGHT SECONDS . . .’’ As the baby-boom generation begins to reach traditional retirement ages, at the rate of ‘‘one every eight seconds’’ (Greenblatt 2007), the pace of population aging will rapidly accelerate. Although this commonly cited statistic succinctly conveys the speed with which the population will age, it conceals an important detail about the size and distribution of the nineteen-year baby-boom cohort—namely, that there are more boomers in the cohort’s younger, second half (see table 1-1). Thus, although boomers born in 1946 will soon reach retirement age at the rate of one every 11.5 seconds,

TABLE 1-1. Age Group 0 to 4 5 to 14 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 and over TOTAL

U.S. Population by Age Group, 1960–2030 (millions) 1960

1970

1980

20.3 B 17.2 16.5 35.7 B 40.8 A 34.8 24.2 35.8 A 42.5 B 22.7 25.1 37.4 B 24.1 23.0 25.8 20.6 23.3 22.7 15.6 18.7 21.8 11.0 12.5 15.7 5.6 7.6 10.1 180 204 227

1990

2000

18.4 19.2 35.2 41.1 36.8 39.4 43.2 Y 39.8 37.6 Y 45.1 B 25.2 38.0 B 21.1 24.4 18.1 18.4 13.1 16.7 249 282

2010*

2020*

2030*

21.4 22.9 24.3 40.5 44.5 47.3 43.0 42.2 46.6 41.6 45.1 44.9 41.1 42.8 46.7 44.8 O 40.9 42.9 36.2 O 42.7 O 39.4 21.3 31.8 O 37.9 M 19.0 22.9 33.5 M 309 336 364

*Estimated Population Source: U.S. Census Bureau, CPS Reports P-25, Numbers 917, 1095.

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PERSPECTIVES ON THE BOOMERS

TABLE 1-2.

U.S. Population Growth by Age, 1960–2030 (percent)

Age Group

1960– 1970

0 to 4 5 to 14 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 and over TOTAL

1970– 1980

1980– 1990

15.0 4.1 11.5 14.3 B 14.7 1.1 48.0 B 18.7 A 13.4 10.6 49.0 A 15.5 B 4.6 12.2 45.7 B 13.1 2.6 11.0 19.9 16.6 3.2 13.6 25.6 15.3 35.7 32.9 29.7 13.3

11.4

9.5

1990– 2000

2000– 2010*

2010– 2020*

2020– 2030*

4.3 16.8 7.1 7.9 19.9 Y 50.8 Y 15.6 1.7 27.5

11.5 1.5 9.1 4.5 8.9 17.9 B 48.4 B 15.8 13.8

7.0 9.9 1.9 8.4 4.1 8.7 18.0 O 49.3 O 20.5

6.1 6.3 10.4 0.4 9.1 4.9 7.7 19.2 O 46.3 O

9.6

8.7

8.3

13.3

*Projected growth Source: U.S. Census Bureau, CPS Reports P-25, Numbers 917, 1095.

boomers born in 1960 (the peak birth year of the baby boom) will retire at the rate of one every 7.5 seconds. From a public policy perspective, the first wave of boomer retirees will be a harbinger of trends that will intensify when the larger, second half of boomers retire a decade later. In the meantime, however, one should not forget that the oldest boomers have just entered their 60s, whereas the youngest are still in their early 40s. Today, the fastest-growing age group is the one that contains the first half of the baby boom—55- to 64-year-olds (see table 1.2). Indeed, the over-65 population, the much smaller generations born in the Great Depression and the baby-bust years of World War II, is growing slowly today (Frey 2007). Attention to these demographic facts is important because, if policy makers and politicians believe the graying of the population is already in full flight, they may not be prepared for when it actually arrives. BABY BOOMERS AND SOCIAL SECURITY: TROUBLE ON THE ‘‘INFINITE HORIZON’’? As the first wave of baby boomers approaches retirement, there is considerable debate about the magnitude of Social Security’s financial problems. At the center of the debate is the annual Social Security’s Trustees Report. One side—including most media coverage—claims that the Trustees Report clearly indicates that the retirement of the baby-boom generation will ‘‘bankrupt’’ Social Security and that drastic structural changes (such as privatization) are required to restore the program’s long-term solvency. Meanwhile, the other side argues that the report only confirms that Social

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Security faces a challenging but manageable long-term funding shortfall that can be closed through a mix of moderate benefit changes and new revenues. The 2007 Trustees Report forecasts that benefit payments will begin to exceed Social Security’s tax revenues in 2017. After that date, the program would have to begin drawing upon assets in the Social Security trust funds to continue full payment of scheduled benefits—although initially it would only have to draw on interest from the trust fund’s bonds (i.e., U.S. Treasury notes). By 2041, the report projects that there will be no more bonds left to sell and the trust funds will be depleted. This date is often described as the point at which Social Security is ‘‘bankrupt,’’ giving the impression that there will be no money in the program. In reality, upon exhaustion of the trust funds, Social Security will continue to receive annual revenues from payroll taxes and from the partial taxation of the Social Security benefits that higher-income beneficiaries receive. This revenue will be sufficient to pay 75 percent of promised benefits in 2041 and will gradually fall to 70 percent of benefits in 2081—assuming the Social Security Act is not changed. The Trustees Report also presents Social Security’s financial shortfall in dollar terms, and these very large numbers often appear in the press. In the 2007 report, the present discounted value of the seventy-five-year shortfall between projected revenues and expenditures was placed at $4.7 trillion. (The seventy-five-year period is chosen because it includes the entire lifetimes of nearly all current participants.) The report also estimated Social Security’s ‘‘infinite horizon’’ shortfall to be $13.6 trillion—the present discounted value of the difference between projected revenues and benefits from now through eternity. Although it is widely agreed that Social Security faces a significant longterm funding shortfall if no changes are made to the program, many analysts question the reliability or usefulness of calculating Social Security’s unfunded obligation over seventy-five years, given the uncertainty of economic and demographic trends over such a long period. Likewise, the infinite horizon measure, which was first included in the 2003 Trustees Report, has been strongly criticized by actuaries and other Social Security analysts as a highly speculative and misleading measure (see Stone and Greenstein 2007). Indeed, observers note that the outlook for Social Security presented in the Trustees Report has changed significantly in just the past decade (see table 1-3). From 1997 to 2007, the date by which the trust fund was projected to be exhausted rose by twelve years—from 2029 to 2041. In other words, although the outlook for Social Security tends to change little year to year, the recent trend has been one of an improving outlook for Social Security, rather than a worsening one. Furthermore, the nonpartisan Congressional Budget Office (CBO) does not project a shortfall for Social Security until 2052, a decade longer than the prediction of the Social Security trustees (Congressional Budget Office 2005).

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TABLE 1-3.

Report Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

PERSPECTIVES ON THE BOOMERS

History of Social Security Trustees’ Estimates 75-year Deficit as a Percent of Taxable Payroll

Infinite Horizon Deficit as a Percent of Taxable Payroll

2.23% 2.19 2.07 1.89 1.86 1.87 1.92 1.89 1.92 2.02 1.95

NA NA NA NA NA NA 3.8% 3.5 3.5 3.7 3.5

Year When Costs First Exceed Total Revenues 2019 2021 2022 2025 2025 2027 2028 2028 2027 2026 2027

Year When Trust Fund is Exhausted 2029 2032 2034 2037 2038 2041 2042 2042 2041 2040 2041

Source: Trustees Reports, various years, as cited in Chad Stone and Robert Greenstein, ‘‘What the 2007 Trustees’ Report Shows about Social Security,’’ Center on Budget and Policy Priorities, April 24, 2007, available at http://www.cbpp.org/4-24-07socsec.pdf.

In addition, many economists and policy analysts question the Trustees Reports’ specific assumptions about future economic growth and demographic change. In particular, they argue that the trustees’ assumptions about the performance of the economy are overly pessimistic and thus overstate the program’s financial problems. Historically, gross domestic product (GDP) growth has averaged 3.4 percent annually after accounting for inflation, according to the Bureau of Economic Analysis (GAO 2006). But in their assumption of longrun real economic growth, the Social Security trustees use a range between 1.1 percent and 2.7 percent, with 2.0 percent assumed for the intermediate (best estimate) assumptions. If the trustees’ intermediate assumption is right, growth will be 41 percent slower in the future than it has been in the past. This has important implications for the Social Security debate. As Friedland and Summer (2005) argue, small differences in sustained economic growth can have a dramatic impact on the fiscal future of society. According to their analysis, if real economic growth averages about 2.6 percent per year between now and 2050, then projected government expenditures could be about the same proportion of GDP as today. Indeed, it is worth noting that under what the trustees label their ‘‘optimistic’’ assumptions, the trust fund would remain solvent over the entire seventy-five-year projection period (and, in fact, their ‘‘optimistic’’ projections have proven to be correct in the past decade). Although it would be foolish to assume that the United States will simply grow its way out of the fiscal challenges presented by the retirement of the babyboom generation, Friedland and Summer argue that it would be equally foolish

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to assume that the future will be completely dismal without radical restructuring of government programs such as Social Security. ‘‘Population growth and change will affect society,’’ they write, ‘‘but so too will policy choices’’ (2005, 4). Indeed, prominent economists such as Peter Diamond and Peter Orszag, Henry Aaron and Robert Reischauer, and former Social Security commissioner Robert Ball have put forth a range of proposals to restore Social Security solvency that offer various combinations of modest benefit reductions and revenue increases (for an excellent summary, see Sass, Munnell, and Eschtruth 2007). These proposals include, among other ideas, raising the cap on earnings subject to the Social Security payroll tax. Currently, Social Security benefits are financed by a 12.4 percent tax on earnings (split evenly between workers and employers) with a cap on wages subject to the tax of $97,500 in 2007. When the current cap was put in place, Social Security taxed about 90 percent of all U.S. earnings. But growing income inequality has shrunk the Social Security tax base. Today, with the increased concentration of income among the highest-paid, Social Security covers only 84 percent of all wage and salary income earned in the United States. To once again cover 90 percent of wages, the cap would have to rise to $177,600. Although this change would affect only 6 percent of workers—whose benefits would be increased as well—it would eliminate 45 percent of the seventy-five-year projected shortfall (Sass, Munnell, and Eschtruth 2007). Eliminating the earnings cap altogether, without increasing benefits for the highest-paid, would produce a surplus in the system over the next seventy-five years (Spriggs 2005). Opponents argue that raising the cap could undermine political support for the program in Congress and among those with the highest earnings. But this is hardly a radical idea—in 1993, the Medicare tax cap was completely eliminated without increasing benefits at all, and it was accomplished with almost no political debate (Schulz and Binstock 2006). Moreover, those who would be affected by this change tend to earn a large percentage of their income from capital gains, interest income, and dividends—and Social Security taxes are not assessed on this income. In addition, income from these sources is taxed at a much lower rate than wage/salary income—a maximum of 15 percent under the Bush administration’s 2003 tax cuts. Although the different proposals can be debated, it is clear that the issue is not a lack of options but rather a lack of political will. In any case, by 2041 time will have taken its toll on the baby boomers. The oldest members of this generation will be in their 90s, and the youngest will be 77. Even if no changes have been made to the system by that time, Social Security benefits will still be available to support them in their retirement. THE RISING TIDE OF HEALTH CARE COSTS: ARE AGING BOOMERS TO BLAME? For years, pundits and politicians have predicted that the retirement of the baby boomers will accelerate growth in health care spending and that such

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growth will ‘‘bankrupt’’ the government’s health care programs (Pan, Chai, and Farber 2007). This scenario has powerful face validity. On average, acute and chronic illnesses increase with age, and per-capita health expenditures rise very rapidly after 65. Indeed, as a share of the U.S. economy, federal spending for Medicare and Medicaid together already exceeds outlays for Social Security—4.5 percent versus 4.3 percent of GDP in 2006. And the CBO projects that if health care costs continue growing faster than the economy, federal spending on Medicare and Medicaid alone would rise to about 20 percent of GDP by 2050—roughly the same share of the economy that the entire federal budget accounts for today! (Orszag 2007). Yet a closer analysis of the CBO projections shows that population aging is not the primary factor driving the rise in America’s health care costs. By itself, growth in the share of the older population accounts for less than 20 percent of the projected growth in federal Medicare and Medicaid spending over the next fifty years, whereas growth in medical spending per person above and beyond the increase attributable to population aging and economic growth accounts for about 80 percent. Indeed, research has consistently found that the aging of the population alone is not likely to be a major driver of the annual growth in the demand for health care and in national health spending (Reinhardt 2003). Other factors, such as new diagnostic and curative technologies and more sophisticated prescription drugs, play a much bigger role. Other reasons relate to characteristics of the health care system—including fee-for-service payment, medical price inflation, health care workforce shortages, and weak controls on the supply and use of services (Strunk and Ginsburg 2002). Together, these characteristics encourage the provision of more health care services, rather than the more efficient use of health care resources. Reforms that eliminate the health care system’s inefficiencies may help reduce Medicare and Medicaid’s growth rate, but are unlikely to hold health care expenditures in the public sector at their current share of the economy. This is because new medical technologies and therapies have enabled baby boomers to live longer and healthier lives—and it is hard to believe that Americans will not want to avail themselves of such medical advances in the decades ahead, even if they entail significant costs. The challenge for political leaders and policy makers therefore ‘‘is to pursue major reforms that eliminate inefficiencies in the health care system and restrain costs in the system to the greatest extent possible without unduly constraining medical progress’’ (Kogan et al. 2007, 4). New evidence suggests that there are opportunities to reduce health care costs without incurring adverse health consequences. Although the United States outspends all other nations in health care (including those whose populations already have the age structure that the U.S. population will reach only in 2020–2025), its higher costs are not accompanied by measurable advances in overall health outcomes (McKinsey Global Institute 2007).

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Indeed, within the United States there is significant evidence that ‘‘more expensive care doesn’t always mean higher quality care’’ (Orszag and Ellis 2007, 1794). Perhaps the most compelling evidence comes from the substantial differences in per-enrollee Medicare spending in various regions of the country—and the fact that higher-spending regions do not generate better health outcomes than lower-spending regions, controlling for differences in the health of the population and medical prices (Fisher et al. 2003). WILL RETIRING BOOMERS SINK THE STOCK MARKET? In addition to concerns about how the boomers’ retirement will strain the nation’s retirement and health systems, worries about a future market ‘‘meltdown’’ as a result of demographic changes have frequently appeared in the media over the past decade. In 2006, Fortune featured an article with this provocative headline: ‘‘The Boomer Bust: Will Aging Boomers Pull Their Money Out of the Market and Cause an Asset Meltdown on Their Way to Retirement?’’ The article speculated that just as the boomers helped fuel a spectacular bull market in the 1980s and 1990s by buying stocks, they will trigger a lengthy bear market when they retire and begin selling stocks. The reason that these ‘‘demography is destiny’’ stories attract a lot of attention in the financial press is that ‘‘there is an underlying link between the age structure of the population, the demand for assets, and the prices of assets’’ (Poterba 2004, 45). However, as Poterba notes, the critical issue is to quantitatively determine how important demographic factors are in relation to other factors that influence asset prices. Several empirical studies argue that the rise in stock market prices in the 1990s can be attributed to the entry of the baby-boom cohort into its ‘‘peak saving years,’’ and some have forecast a sharp and sudden decline in asset prices in coming decades as boomers sell their assets to the smaller babybust cohort that follows them (see, for example, Schieber and Shoven 1997; Brooks 2002; Geanakoplos, Magill, and Quinzii 2004; Siegel 2005). In a survey of the literature, Poterba (2004, 47) concludes that a ‘‘reasonable consensus analysis’’ would suggest that the large number of baby-boom retirees may reduce the market’s annualized return by about one-half of 1 percent (or fifty basis points) over the next couple of decades. Although a half-point decline seems somewhat small in comparison to real annual U.S. stock returns (which have averaged about 8 percent from 1946 to 2004), the effect is more substantial when considered in terms of its accumulation over a long period. Compounded annually over thirty years, this would mean that for two investors—one who earns 8 percent and the other 7.5 percent—the former investor’s assets would be worth about 13 percent more. (The proportional effect of a 0.5 percent decline in annual return would be smaller if the baseline level of the return was higher, but the absolute effect in terms of dollars would be larger.) Even so, Poterba concludes

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that the evidence suggests only modest effects, if any, of demographics on returns and does not support the alarmist asset market ‘‘meltdown’’ view. A subsequent report from the GAO (2006) on the market impact of the baby boom’s retirement came to a similar conclusion. Based on a survey of academic studies as well as its own empirical research, the GAO determined that, although there is some evidence to suggest that the baby-boom retirement will have a negative effect on financial asset returns, it does not support the claim that it will cause a ‘‘dramatic decline’’ in stock prices or returns. The GAO found that demographic variables explained on average about 6 percent of the variation in annual stock returns from 1948 to 2004, but other macroeconomic and financial variables in their statistical model explained nearly half of the variation in historical stock returns. This suggests that such factors outweigh any demographic effect on stock returns. Furthermore, the GAO report argues that the potential for the baby-boom generation to precipitate a market meltdown in retirement may be substantially reduced because a small minority of this population holds the majority of the generation’s financial assets. According to the GAO’s analysis of the 2004 Survey of Consumer Finances, the wealthiest 10 percent of boomers owned more than two-thirds of the generation’s financial assets, including stocks, bonds, mutual funds, individual retirement accounts (IRAs), and other account-type retirement savings plans (see figure 1-1). In fact, about a third of boomers do not own any financial assets. This concentration of wealth means that boomers may be less pressured to spend down their financial assets in retirement. Research on current retirees indicates that the wealthiest are able to support themselves on the income these investments generate without spending them down significantly (Carroll 2000). The

FIGURE 1-1. Distribution of Baby Boomer Financial Assets, by Wealth Percentiles Note: Financial assets include stocks, bonds, mutual funds, IRAs, Keogh plans, and other account-type retirement savings plans. The distribution of baby boomers is based on total wealth, defined as the net of all assets that each household owns and all outstanding debts. Source: GAO analysis of 2004 Survey of Consumer Finances.

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GAO also noted that boomers will retire not all at once, but over a nineteenyear span, which mitigates the risk of a shock to financial markets. Other scholars, mostly economists, have noted several other scenarios that might ease the impact of the aging of the baby boom on the performance of U.S. financial markets. For example, increases in life expectancy and the expectation of many boomers to work past traditional retirement ages will likely spread asset sales over a longer period of time than was typical for earlier generations. In addition, rather than face the prospect of a sharp sell-off in stocks, companies will most likely find ways to make stocks more attractive to the shrinking number of buyers by increasing their dividends—allowing retirees who need income to continue holding their assets. Another counter to the asset ‘‘meltdown’’ theory is that boomers may use their homes to finance retirement through instruments like reverse mortgages, since houses are generally older Americans’ largest assets—not stocks, bonds, or mutual funds. Also, some have noted that the emergence of global capital markets means aging boomers in the United States need not sell exclusively to young Americans. Indeed, some noted economists (Siegel 2005; Fehr, Jokisch, and Kotlikoff 2005) predict young investors in emerging economies such as India and China will be net buyers of capital when aging American boomers begin to sell. WILL THE BOOMERS DRAIN THE LABOR POOL? For several years now, the business press and media have been warning that the U.S. economy will soon experience widespread job vacancies because of a shortage of workers. Behind the predictions of a coming labor crisis are demographic forecasts that the U.S. labor force will grow more slowly than in the past as the baby-boom generation retires and is replaced by the smaller babybust generation. Labor force projections from the Bureau of Labor Statistics (BLS) point to a lower labor force growth rate of 0.8 percent per year for the 2006–2016 period, compared to an annual growth rate of 1.2 percent during the 1996–2006 decade. In addition, as the population ages, the labor force’s age composition will change dramatically. According to BLS projections, the overall labor force (16 years and older) will increase by just 9 percent between 2006 and 2016, but the age-55-and-older workforce will increase by 47 percent. The BLS also forecasts that the median age of the labor force will increase to 42.1 years in 2016, from 35.4 years in 1986 (Toossi 2007). The concern among business and government leaders is that low labor force growth associated with population aging will lead to slower economic growth and, in turn, declines in overall living standards (Cappelli 2004). Although the baby-bust cohort—those born after 1964 and through the 1970s—is smaller than the baby boom, Cappelli (2004) argues that it is wrong to assume that a smaller cohort of workers will necessarily lead to a labor shortage. He points out that, even though entry-level cohorts may be smaller in the future, the overall number of college graduates will actually

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rise—and it is college graduates who employers most demand. When baby boomers were in high school in the 1960s and 1970s, fewer than 50 percent of graduates went on to college. Now, according to the National Association for College Admission Counseling, about two-thirds move directly into postsecondary education. Moreover, Cappelli notes that behind the baby-bust cohort is another large generation—the ‘‘echo’’ children of the baby boom (now in their teens and 20s)—that is just beginning to enter the workforce. According to Census Bureau data, births in 1990 were the highest recorded since the baby-boom days of the early 1960s. Now, eighteen years later, the children of baby boomers are making news headlines as the largest high school class in the history of the United States sets its sights on college (Hofius Hall 2008). As for the fear that baby boomers’ retirement will contribute to a serious labor shortage, Cappelli argues that it is unrealistic to assume boomers will retire at age 65, given the lengthening average life span. As baby boomers approach traditional retirement age, there is evidence that they are choosing to stay in the workforce longer, alleviating the threat of a sudden and severe labor shortage. According to the BLS, the number of older people in the workforce has doubled in the past twenty years. Almost 20 million men and women aged 55 to 64 were employed in 2006, representing 13 percent of the total labor force—up from 12 million (10 percent) in 1986. At the same time, the overall labor force participation rate for this group increased from 54 percent to 64 percent. This is an important trend, since most of this age group are members of the (smaller) front end of the baby-boom cohort, and their labor market attachment suggests increased numbers of older workers in the near future as the later and larger part of the baby-boom generation ages. Retirement experts say the increase in older workers primarily reflects inadequate retirement savings, the erosion of traditional defined-benefit pensions, and rising health care costs. In addition, there is evidence that labor force participation among older workers has risen in response to the increase in the eligibility age for full Social Security benefits and the elimination of the earnings test for workers at full retirement age and beyond (GAO 2007). Beyond financial incentives, surveys by AARP (2004) and Civic Ventures/MetLife Foundation (2005) also have found that the majority of baby boomers—upwards of 70 percent—plan to work past traditional retirement age for reasons associated with feelings of social and mental well-being. Furthermore, higher education levels, improved health status among today’s older workers, and a decline in physically demanding jobs imply a continued upward trend in labor market participation (Turner 2007). Whatever the reasons, even a modest increase in the labor force participation rate of baby boomers will increase the labor supply significantly because of the cohort’s large size. However, significantly higher boomer labor force participation rates are not inevitable. Munnell (2006) cites a number of factors that could adversely affect the demand for and supply of older workers. On the demand side, cost is the

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paramount issue. At the same productivity level, older workers’ higher wages and benefits—health insurance and pensions—make them more expensive than younger workers. On the supply side, health conditions and few flexible work/retirement options are major hurdles to continued employment. In addition, employment-based age discrimination, although illegal, remains pervasive (McCann 2004). A study of age bias conducted by the Center for Retirement Research at Boston College found a younger worker is 40 percent more likely to be called in for an interview than a worker age 50 or over (Lahey 2005). Furthermore, although most baby boomers plan to work longer than their predecessors, it is too early to assume that this is what they will actually do. The annual Retirement Confidence Survey has consistently found that approximately four in ten retirees leave the workforce earlier than planned (37 percent in 2007). Many retirees who retire early cite health problems, disability, or changes at their company (such as downsizing or closure). Others indicate work-related reasons, such as obsolete skills (Employee Benefit Research Institute 2007). Yet, even if baby boomers’ retirements lead to a slowdown in labor force growth, it does not necessarily mean that overall living standards will decline, as many observers fear. Certainly, the concern is understandable, since workforce growth has been a key to U.S. economic growth for most of the past half-century. However, the economy’s growth rate is determined by the rate of increase in the labor force plus the rate of increase in productivity. Indeed, the steady rise in U.S. living standards is due to productivity (output per worker) that has outpaced the labor force growth rate: The U.S. economy today is about eight times bigger than it was at the end of World War II, but the workforce is only twice as big (Friedland and Summer 2005). Although future economic growth will likely have to rely less on labor force growth and more on higher productivity, many economists expect productivity to continue to grow enough over the next half-century to ensure rising standards of living for everyone (Wray 2006). In fact, some argue that an aging society could help achieve higher productivity growth. Alan Greenspan, former chairman of the Federal Reserve, has speculated that a slowed rate of growth or a decline in the working-age population associated with aging should increase the incentives for developing labor-saving technologies and may actually spur technological innovation—a critical determinant of labor productivity (Greenspan 2003). Merette (2002) predicts that a rising ratio of retirees to workers will result in tight labor markets that will create upward pressure on wages in general. These labor conditions, he argues, will propel investments in human capital (education and training), ‘‘whose importance as an engine of growth is increasingly being recognized as industrialized countries shift away from resource-based and toward knowledge-based economies’’ (2002, 3). Merette points out that rising wages should also induce many older workers to keep working, further limiting labor shortages.

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Thus, one cannot conclude that the retirement of the baby boomers will lead to widespread labor shortages. Although there may be a possibility of ‘‘spot’’ shortages in specific geographic areas and occupations (Kuhn 2003), even this scenario will depend on the ability of the labor market to make adjustments as needs emerge. Just as the labor market adapted to the baby boomers’ entrance into the workforce, many economists predict that employers and governments will proactively adjust their policies and practices to accommodate older workers and prevent labor shortages (Wray 2006; Greenspan 2003). HARNESSING THE POWER OF THE AGE WAVE Currently, much of the discussion about an aging society focuses on its cost and perpetuates the stereotype that older adults place a burden on society. In reality, older Americans’ social and economic contributions are considerable. According to data from the 2006 Current Population Survey (CPS), about 17.3 million adults age 55 and over are engaged in formal volunteer activities (defined as volunteering for a religious, educational, health-related, or other charitable organization). Americans age 65 and over devoted the most time to community activities—double the national median annual hours for all ages. Using a moderate cost assumption, Johnson and Schaner (2006) estimate that adults age 55 and over contributed $44.3 billion through formal volunteer activities in 2002. Volunteers’ contributions are increasingly important given the government’s growing reliance on nonprofits to deliver public services. Baby boomers could boost the volunteer sector, not just because of the generation’s size but also because of its members’ relatively high levels of education, wealth, and skills. Although some research argues that baby boomers have been less civically engaged than preceding generations (Putnam 2002), more recent studies find that baby boomers are volunteering at higher rates than previous generations. According to Census Bureau surveys of volunteer activity, an estimated 31 percent of baby boomers volunteered when they were age 46 to 57, compared with an estimated 25 percent of the ‘‘greatest generation’’ (born between 1910 and 1930) at the same ages (Foster-Bey, Grimm, and Dietz 2007). In addition, new research finds a high commitment to formal volunteer work among the newly retired. Using data from the Health and Retirement Study, Zedlewski (2007) examined transitions from work to volunteering for adults age 55 to 64 who retired between 1996 and 2000. Among those who retired, 45 percent engaged in formal volunteer activities within a four-year postretirement period—even though only 34 percent had volunteered while working. Noting that the population age 55 to 64 will be about 75 percent larger by 2020 than in 2000, Zedlewski remarks that ‘‘nonprofit organizations seem destined to benefit from a significant growth in the services of retirees’’ (2007, 6).

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However, surveys find that most nonprofit and voluntary organizations are not prepared for the challenge of engaging large numbers of baby boomers in meaningful service (Casner-Lotto 2007). For the last two decades, the voluntary sector has benefited from the substantial contributions of older volunteers whose strong community values were shaped in the World War II era. Despite being placed mostly in routine administrative or fundraising roles, this small cohort of older volunteers has been giving a disproportionate share of volunteer hours (Reed and Selbee 2001). Now the ‘‘greatest generation’’ members are rapidly aging out of the volunteer ranks, leaving behind gaps that must be filled. But a growing body of evidence suggests that baby boomers are not willing to perform the traditional ‘‘envelope-stuffing’’ tasks that their predecessors have been doing. Consistent with their higher levels of education and professionalism, boomers demand ‘‘interesting, growth-producing, mission-critical, productive, high-level, highimpact work that allows them the freedom to apply their high skills and influence’’ (Graff 2007). In fact, studies show that baby boomers who engage in professional or management activities such as strategic planning, marketing, or volunteer coordination are the most likely to continue volunteering from one year to the next, while those involved in general labor and routine tasks such as driving, fundraising, and meal preparation are the least likely (Foster-Bey, Grimm, and Dietz 2007). Experts on civic engagement and aging agree that attracting baby-boomer volunteers to the nonprofit world will be critical to solving a wide range of social problems in the years ahead. According to Marc Freedman, founder of Civic Ventures, the aging of the baby boom and its improved circumstances could provide a windfall for civic life in the twenty-first century by greatly increasing the number of people available to address the needs of American communities (Freedman 1999). In addition, there is substantial evidence that older adults who volunteer live longer and enjoy better physical and mental health than their counterparts who do not volunteer (Grimm, Spring, and Dietz 2007). Recipients of volunteer services, children in particular, also benefit from older adults’ engagement—especially in educational activities. And increased volunteerism potentially reduces costs, as healthier older adults require fewer health care dollars (Zedlewski and Butrica 2007). CONCLUSION: DEMOGRAPHY IS NOT DESTINY Although the aging of the baby-boom generation is commonly depicted in the popular press as cause for alarm, the empirical evidence reviewed here suggests there is no reason to fear the coming demographic shift. In fact, the benefits of an aging population may outweigh the costs as millions of boomers—buoyed by gains in longevity, education, and health—are expected to reinvent retirement as a more active stage of life that mixes work, leisure, and national service (Harvard School of Public Health/MetLife Foundation

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2004). But this will require that we create new public policies and institutions that enable older adults to make continuing contributions to society. Fortunately, recent years have seen the growth of a wide range of organizations—in the private, public, and nonprofit sectors—that help advance the goal of ‘‘civic engagement’’ in later life (e.g., see ‘‘The Civic Enterprise’’ at http://www.civicengagement.org). We have also reviewed good evidence to suggest that an aging population and slower labor force growth does not necessarily imply lower productivity growth. Indeed, as Fogel and Prusiner (2007) and Moody (2005) have argued, an aging society can be expected to spur ‘‘silver industries’’ (especially in the area of health care services) that will be the new drivers of the American economy.

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Schieber, S., and J. Shoven. 1997. The consequences of population aging on private pension fund saving and asset markets. In Public policy toward pensions, ed. S. Schieber and J. Shoven, 219–45. Cambridge, MA: MIT Press. Schulz, J. H., and R. H. Binstock. 2006. Aging nation: The economics and politics of growing older in America. Westport, CT: Praeger. Siegel, J. 2005. The future for investors. New York: Crown Business. Sonnega, A. 2006. The future of human life expectancy: Have we reached the ceiling or is the sky the limit? Research Highlights in the Demography and Economics of Aging, no. 8. Available at http://www.prb.org/pdf06/NIA_FutureofLifeExpectancy.pdf. Spriggs, W. E. 2005. Pulling a fast one? The facts about Social Security. Crisis (March/April): 17–21. Available at http://www.epi.org/issueguides/socialsecurity/ spriggs.naacp.crisis.20050304.pdf. Stone, C., and R. Greenstein. 2007. What the 2007 Trustees’ Report shows about Social Security. Center on Budget and Policy Priorities, http://www.cbpp.org/4-2407socsec.pdf. Strunk, B. C., and P. B. Ginsburg. 2002. Aging plays limited role in health care cost trends. Center for Studying Health System Change Data Bulletin No. 23. Available at http://www.hschange.org/CONTENT/473/. Toossi, M. 2007. Labor force projections to 2016: More workers in their golden years. Monthly Labor Review 130 (11): 33–52. Available at http://www.bls.gov/ opub/mlr/2007/11/art3full.pdf. Turner, J. A. 2007. Promoting work: Implications of raising social security’s early retirement age. Center for Retirement Research at Boston College. Available at http://crr.bc.edu/briefs/ promoting_work_implications_of_raising_social_securitys_early_retiremen.html. United Nations. 2001. Replacement migration: Is it a solution to declining and ageing populations? New York: United Nations, Department of Economic and Social Affairs, Population Division. Available at http://www.un.org/esa/population/ publications/ReplMigED/migration.htm. Wray, L. R. 2006. The burden of aging: Much ado about nothing, or little to do about something? Levy Economics Institute of Bard College Policy Note 2006/5. Available at http://www.levy.org/pubs/pn_5_06.pdf. Zedlewski, S. R. 2007. Will retiring boomers form a new army of volunteers? Perspectives on Productive Aging, No. 7. Available at http://www.urban.org/ UploadedPDF/411579_retiring_boomers.pdf. Zedlewski, S. R., and B. A. Butrica. 2007. Are we taking full advantage of older adults’ potential? Perspectives on Productive Aging, No. 9. Available at http:// www.urban.org/UploadedPDF/411581_adult_potential.pdf.

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Boomer Diversity and Well-Being: Race, Ethnicity, and Gender JAN E. MUTCHLER AND JEFFREY BURR

B

etween 1946 and 1964, 76 million children were born in the United States as part of an upswing in births that began at the end of World War II and continued for almost twenty years (National Center for Health Statistics 2002). The ‘‘baby boom’’ cohort is now firmly embedded in midlife, with members of this generation being between 42 and 60 years of age in 2006. Although decades of mortality have taken a toll, the baby boomer population paradoxically now numbers 78 million individuals (U.S. Census Bureau 2006). This apparent ‘‘growth’’ of the boomer population occurred because birth cohort losses through mortality were more than offset by the immigration of boomer-aged, foreign-born individuals who arrived in the United States at some point during their lifetimes, a process facilitated by a massive transformation of immigration policy occurring just as the baby boom was ending (Haaga 2007). Almost one in six of today’s aging boomers is an immigrant, the vast majority of whom were born in Latin America or Asia. Boomers represent not only the largest cohort in American history to find themselves on the doorstep of later life, but, due in part to these immigration trends, the boomer generation also contains patterns of race and ethnic diversity not seen in previous cohorts. Our goal in this chapter is to examine the implications of this diversity for the well-being of boomers as they approach later life. To begin, we briefly comment on the historical and demographic context shaping the experience

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of boomers, especially factors that have redefined the significance of race, ethnic, and gender group membership for this cohort.1 Next, we build on this discussion by presenting current evidence on two dimensions of well-being that become increasingly important as individuals enter the later stages of life: economic well-being and health status. These dimensions are important at all ages, but especially so in later life when lifelong processes of inequality in economic and health-related experiences become personal challenges for many individuals and their families, as well as public concerns for governmental and nongovernmental programs and organizations serving seniors. THE HISTORICAL AND DEMOGRAPHIC CONTEXT OF THE BABY BOOM AND DIVERSITY Prior to 1946, birthrates had been declining for several decades, leading many scholars at the time to proclaim an imminent end to population growth in the United States. In a sharp turnaround, more than three million babies were born in 1946, half a million more than had been born in the previous year (National Center for Health Statistics 2002). Rather than reflecting a short-term pattern of making up for lost time associated with the separation of couples and families during World War II or compensating for longer-term deferred childbearing during the Depression, this surge in births reflected the start of a long-term trend in fertility that would continue for nearly twenty years. During the baby boom era, the number of births rose progressively higher each year until 1957, when 4.3 million children were born. As the boomers moved through childhood and early adulthood, they would leave an impression on virtually every major social and economic institution in America, including schools, workplaces, and health care settings. Boomers represent 26 percent of the total U.S. population and are more numerous than any previous twenty-year birth cohort in American history. As the leading edge of the baby boom approaches later life, with those born in 1946 reaching age 65 in 2011, their decisions about work, retirement, and leisure, as well as their resources in terms of health, income, and wealth, take on unprecedented national significance (Eggebeen and Sturgeon 2006). The baby boom era opened on a society that drew sharp lines separating men from women, and race and ethnic groups from one another, in terms of social and economic opportunity. Although during the war women had become actively involved in paid work and other activities that had previously been closed to them, the return of GIs to the workplace signaled a resumption of domesticity for many of America’s wives, mothers, and daughters. Schweitzer (1980) reports that just before World War II, 27 percent of women age 14 and over were in the labor force (many of whom were unemployed), and by 1943 the female labor force had increased to 37 percent. As of 1947, the female labor force participation rate returned to prewar levels, and it would take a number of years and many social and legal changes for women to return to the labor force with equal and even greater commitment.

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Race relations in the mid-1940s were focused heavily on the African American population vis-a-vis the white population. Other than the whites, the most sizable racial group was U.S.-born African Americans, many of whom were only a generation or two removed from slavery. Jim Crow laws were in effect throughout the Southern states, and race segregation was a fact of life in schools and communities nationwide. Although demographic data on the Hispanic population was not systematically collected during this time, estimates suggest that this group was considerably smaller than the African American population and heavily concentrated in a relatively small number of southwestern and western states (Gibson and Jung 2002). The share of the population that was of Asian or Native American origin was also quite small and regionally concentrated. Boomers born during this era witnessed and participated in momentous sociopolitical movements challenging inequalities then in place, many of which were a response to long-present divisions associated with race, ethnicity, and gender. The civil rights movement of the 1960s and 1970s, the transformation of immigration policy in 1965, and the struggle for the Equal Rights Amendment for women in the 1970s were markers of a cultural reshaping of group and self-identity, opportunities, and expectations among women and members of nonwhite racial and ethnic groups. For boomers, the sheer density and timing of these movements—most of these occurring as the leading edge of the boomers approached adulthood—and the associated challenges to the status quo had special significance. As a result, this diverse cohort is poised to reshape the character of later life in part because they bring with them unique views of the meaning and significance of race, gender, and ethnicity. These social and cultural revolutions were accompanied by another demographic revolution that continues today, as the United States continues on a path of ever-growing racial and ethnic diversity. Baby boomers represent not only the largest cohort to reach later life in the history of the United States but also the most racially diverse. In 2006, 27 percent of the boomer cohort was either nonwhite or Hispanic, a far larger share than similarly aged individuals just a generation ago. For example, in 1980 just 16 percent of adults ages 42–60 were either nonwhite or Hispanic (calculated from the 1980 Census [Ruggles et al. 2004]). African Americans currently make up 11 percent of the boomer population, with the Hispanic proportion nearly as large (10 percent in 2006). The Asian-origin population contributes 4 percent, while 2 percent of boomers are of some other race (see figure 2-1).2 A significant factor driving the racial and ethnic diversity of the boomer cohort is the pattern of immigration to the United States over the past several decades. Following the large flows of mostly European immigrants to the United States at the turn of the twentieth century, the number of new immigrants declined precipitously until 1970, when increasing immigration levels resumed. The largest share of these post-1970 immigrants are from Asia and Latin America (Bean and Stevens 2003). Many new arrivals in the

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FIGURE 2-1. Baby Boom Population by Race and Ethnicity, 2006 Note: Calculations based on people aged 42–60 only. Source: Calculated by the authors from 2006 American Community Survey microdata.

1970s and 1980s came as young adults, further swelling the size of the boomer cohort. Indeed, two-thirds of the Hispanic boomers, and nearly nine out of ten Asian boomers, were born outside of the United States (see table 2-1). Because immigration persists at high levels and new entrants continue to be drawn largely from Asian and Latin American countries, the increasing diversity of the United States population is fueled in large part by immigration flows. As a result, birth cohorts younger than the boomers (cohorts including the children and grandchildren of the boomer generation) are even more diverse than the boomers themselves (Myers 2007). Visualizing the implications of these joint processes of aging and ethnic diversity is aided by reference to figure 2-2. This graph represents a modified population pyramid, with age pyramids displayed for 2006 (on the left) and for the projected 2030 population (on the right). Pyramids for the combined Hispanic and nonwhite populations are superimposed on equivalent pyramids for the non-Hispanic white population at each time point in order to show the relative size of each segment of the population as it differs by age group and as it is expected to change over time. As seen in the pyramid, the baby-boom cohort constitutes a ‘‘bulge’’ in the age structure at each time point, but is noticeable only for the non-Hispanic white population. Thus the baby boom has had a far more substantial impact on the age structure of the non-Hispanic white population than it has for the rest of the population. The ongoing immigration patterns, and the fact that the immigrant

Boomer Diversity and Well-Being

TABLE 2-1.

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Baby Boomers by Race and Ethnic Status and Immigrant Status, 2006

Non-Hispanic: White African American Asian Other Race Hispanic/Latino Total

Number of Boomers

Percent born in the U.S.*

Percent born outside the U.S.

56,561,617 8,762,138

95% 89

5% 11

3,425,842 1,357,080 8,013,427 78,120,104

12 86 35 84

88 14 65 16

*Reflects the share born in one of the fifty states. Alternative definitions of U.S.-born (including people born abroad to U.S. parents and/or people born in a U.S. territory) yield similar findings for all groups except for Hispanics. Classifying people born in a U.S. territory or elsewhere to U.S. parents as born in the United States results in the percentage of Hispanics who are classified as U.S. born increasing from 35 percent to 42 percent. Note: Calculations based on people aged 42–60 only. Source: Calculated by the authors from 2006 American Community Survey.

FIGURE 2-2. Age Distribution of the U.S. Population for 2006 (estimated) and 2030 (projected), by Race and Ethnicity Note: Baby boomers are aged 42–60 in 2006 and 66–84 in 2030. Source: Data for 2006 are from the population estimates series, U.S. Census Bureau (2006). Data for 2030 are from the population projection series, U.S. Census Bureau (2004).

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population is far younger than the U.S.-born population, will continue to be reflected in the size and age composition of the segment of the population that is either nonwhite or Hispanic. Considering the left-hand side of the pyramid in figure 2-2, which represents the age structure of the U.S. population in 2006, it is noteworthy that in the youngest age groups, the non-Hispanic white and the other racial and ethnic groups are more balanced in size. Indeed, in 2006, Hispanics and nonwhites together constituted 42 percent of the U.S. population under age 30, but only 19 percent of the population aged 65 and over. Among boomers, who were aged 42 to 60 in 2006, about one-third were persons of color. Looking ahead to 2030 with the aid of projections generated by the U.S. Census Bureau (2004; right-hand side of the pyramid), it is anticipated that people who are either nonwhite or Hispanic will be a significantly larger segment of the population as a whole, but especially among younger age groups. This time frame is important because by 2030 the entire boomer cohort will have entered later life, with the youngest members being age 66. The movement of boomers into later life means that the population age 65 and over will include larger segments of Hispanics and nonwhites (28 percent, as compared to 19 percent in 2007). However, the presence of nonwhites and Hispanics will be still more significant among those younger than the boomers. Indeed, persons of color are expected to make up 43 percent of those aged 30 to 64 in 2030 and fully half of those under age 30. The boomer generation will move through later life embedded in a population that is increasingly composed of nonwhite and Hispanic youth and younger adults, many of whom will be immigrants or children of immigrants. The increasing diversity among younger cohorts is important because these persons will make up larger shares of the labor force and thus contribute to the payroll and other taxes that support programs aimed at assisting elderly boomers. As well, if boomers are to be able to downsize housing, make retirement-based amenity moves, or sell their homes for any other reason, the diverse population of younger adults will need adequate resources to purchase the homes boomers leave behind. Furthermore, a large share of the health care service industry, expected to expand dramatically as boomers’ needs for care increase, will be composed of persons of color (see Myers 2007). THE IMPLICATIONS OF RACE, ETHNIC, AND GENDER INEQUALITY FOR LATER LIFE A high level of inequality characterizes American society, with the result that some individuals reach old age with far fewer economic and health resources than others (Crystal and Shea 1990). To some extent, the pathway to economic security in later life has its roots in childhood and young adulthood. Although far from a deterministic process, on average children born to parents who have few resources accumulate less education, less income, and

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less wealth as they move through the life course, as compared to children born to more affluent parents. Lower likelihoods of completing high school or college correspond strongly with higher risk of unstable employment, poorly compensated jobs, and a reduced accumulation of wealth, ultimately extending to fewer Social Security credits and lower or nonexistent private pension benefits. Research shows that accumulated advantages and disadvantages are carried into old age, resulting in a high level of inequality among those 65 years old and over (Crystal, Shea, and Shreeram 1992; O’Rand 1996). Healthy aging similarly has its origins early in life (George 2003; Hayward and Gorman 2004). Indeed, survivorship itself is distributed unequally in the population, such that those with fewer resources and poorer backgrounds are less likely to survive to old age (Mechanic 2007; Wilson, Shuey, and Elder 2007). Poor health and inadequate access to proper health care cumulates throughout the life course, making it more likely that a person who has been disadvantaged with respect to health care in early life will be disabled in later life. Moreover, because health and disability status have implications for employment and lifetime earnings capacity, poor health and early-onset disability have direct and indirect implications for economic standing in later life. On average, members of some racial and ethnic groups (most notably, African Americans, Native Americans, and Hispanics) are more likely to be born into families with fewer advantages than are their white counterparts, and they continue to accumulate fewer resources as they age. Gaps in the accumulation of wealth and in homeownership levels are evident across racial and ethnic groups (Sykes 2003). Group differences in morbidity and mortality profiles are also well documented. Members of some groups, most notably African Americans and Native Americans, are less likely to survive to old age and more likely to enter old age in a disabled state than whites and Asian Americans (e.g., Goins et al. 2007; Hayward and Heron 1999). Although women typically have educational achievements that are on par with those of men, they are often less likely to convert this resource directly into income or wealth, in part due to family responsibilities and gender roles (Moen and Chermack 2005). Health disparities by gender take the form of more chronic illnesses and higher levels of disability, although women live longer than men on average (Crimmins 2004). Though boomers moved through childhood and young adulthood in an era characterized by expanding opportunities for both women and members of racial and ethnic minority groups, pervasive inequalities continue. The remainder of this chapter takes stock of key elements of inequality currently reflected among boomers at midlife, and we will discuss the differential prospects for a secure old age among members of this generation. Our examination will focus on socioeconomic status and indicators of health and physical well-being. These attributes are reflective of well-being throughout the life course and are highly predictive of well-being in later life, yet at the same time, well-being is sharply differentiated by gender, race, and ethnicity.

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We draw on data from several sources for this analysis. Information on socioeconomic resources is developed from the 2006 American Community Survey (ACS), a large national sample survey collected by the U.S. Census Bureau. Information on health and health behaviors is drawn from the 2006 National Health Interview Survey (NHIS), a large, nationally representative survey conducted annually by the Centers for Disease Control and Prevention’s (CDC) National Center for Health Statistics (CDC 2007). We focus on respondents who were aged 42 to 60 in 2006 (i.e., persons born between 1946 and 1964) and direct our attention to four mutually exclusive racial and ethnic groups: non-Hispanic whites, non-Hispanic African Americans, non-Hispanic Asians, and Hispanics/Latinos. These classifications are based on two survey questions, one focused on self-identified race and another on self-identified Hispanic ethnicity. We acknowledge the heterogeneity of the Asian and Hispanic populations, which include individuals from many different points of geographic origin, immigration histories, and cultural traditions. Sample sizes are inadequate to support separate analyses of the many subgroups within these populations. Sample sizes also preclude analysis of the roughly 2 percent of the boomer population that does not fall into one of these four groups, including persons who self-identify as American Indian, Alaskan Native, Pacific Islander, or Native Hawaiian or who list two or more racial identities. DIVERSITY IN SOCIOECONOMIC RESOURCES AMONG MIDLIFE BOOMERS: RACE, ETHNICITY, AND GENDER The opportunities encountered in early and mid-adulthood, and the ensuing human capital and financial investments made during these life stages, have critical implications for well-being in later life. Key among these investments is the accumulation of educational resources and the purchase of a home. Individuals who complete high school experience far greater job security and lifetime earnings than those who do not, and benefits are higher still for those who attain a college degree. Overall, higher levels of education are associated with greater financial stability, increased wealth, and greater likelihood of retiring with a pension. Similarly, the value of an owned home represents the single most significant source of wealth for most older individuals (Di, Belsky, and Liu 2007). Education As a cohort, the boomers far outstripped the educational achievements of their parents (see table 2-2). Nearly nine out of ten boomers (age 42–60 in 2006) completed high school, and 29 percent had at least a college degree. In contrast, individuals who were aged 42–60 in 1980, roughly the cohort representing boomer parents, were less educated on average, with only 65 percent having completed high school and 14 percent having college

TABLE 2-2. Socioeconomic Investments by Race, Ethnicity, Gender, and Cohort: Boomers in 2006 Compared to Same-Aged Persons in 1980

Group Non-Hispanic: White African American Asian Hispanic/Latino All men All women Total

Percentage with at least a high school diploma

Percentage with at least a college degree

Percentage owning a home

Aged 42–60 in 2006

Aged 42–60 in 1980

Aged 42–60 in 2006

Aged 42–60 in 1980

Aged 42–60 in 2006

Aged 42–60 in 1980

93% 84% 85% 61% 87% 89% 88%

69% 43% 73% 36% 65% 66% 65%

32% 19% 46% 14% 30% 28% 29%

15% 7% 27% 7% 19% 10% 14%

77% 49% 64% 52% 70% 71% 71%

81% 57% 65% 57% 78% 77% 77%

Note: Race and ethnic categorizations used in this table were made consistent between 1980 and 2006 by using the bridged race classification provided in the IPUMS. Source: Calculated by the authors from 2006 American Community Survey and the 1980 U.S. Census of Population.

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degrees. These intergenerational advances in education did not eliminate disparities across race and ethnic groups, however. Substantial differences in educational attainments persist among boomers, as they did for similarly aged individuals in 1980. More than 90 percent of white boomers completed high school, compared to about 85 percent of African Americans and Asians, but just 61 percent of Hispanic boomers. The educational gap is even starker when comparing the percentage of persons from each group having earned a college degree. About a third of white boomers earned at least one college degree, compared to less than one in five African American or Hispanic boomers. Although African American boomers are far more likely to have a college degree than their parents, they continue to lag behind their white counterparts, due to a range of factors, including fewer opportunities for higher education, lower levels of support for their educational aspirations from communities and schools, and other social and economic barriers. Hispanic boomers faced similar challenges in attaining college degrees, coupled for many with the additional challenge posed by their immigrant status. Asian boomers are distinctive among the larger population of boomers in terms of their relatively high numbers of college graduates. Among Asian boomers, nearly half (46 percent) have a college degree, perhaps reflecting the higher value placed on education within many segments of the Asian population, as well as the educational opportunities that have drawn many Asian immigrants to the United States. Because so many of the Hispanic and Asian boomers are immigrants, the achievements of their parents may not be reflected in the statistics from 1980. However, it is clear that for all groups, the boomers have attained higher levels of education than midlife members of the same race and ethnic groups from earlier generations (2006 compared to 1980). In contrast to the human capital differences noted among these race and ethnic groups, comparatively few educational differences are observed between male and female boomers. A slightly larger share of women than men completed high school (89 percent versus 87 percent). Although a somewhat larger share of boomer men completed college (30 percent versus 28 percent), this represents a substantial narrowing of the gender gap in college completion in 1980 (which was then 19 percent for men aged 42–60 and 10 percent for similarly aged women). For female boomers, the significance of educational differences lies less with the years of schooling completed and more with the gendered ways in which educational credentials are translated into earnings, careers, wealth, and pensions. Homeownership Homeownership is an additional investment-based indicator of well-being in adulthood. As a reflection of the ‘‘American Dream,’’ owning a home is an

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aspiration shared by many; moreover, the value of an owned home typically reflects the single most significant asset held by people at all ages, including those in later life. Statistics from the 2006 ACS show that similar patterns of homeownership characterize male and female boomers, with about 70 percent of each gender group owning a home.3 In contrast, racial and ethnic group differences in homeownership are pronounced. More than three-quarters of white boomers own a home (77 percent), followed by 64 percent of Asian boomers, whereas only about half of Hispanic (52 percent) and African American (49 percent) boomers own a home. These rates of homeownership reflect declines from rates for people of the same age in 1980. For example, 57 percent of African American individuals aged 42–60 in 1980 owned a home, compared to just 49 percent of African American boomers in the same age bracket today. The ability of boomers to translate gains in educational investments into other forms of wealth (here, defined by homeownership) appears to have faltered. The escalating costs of homeownership may have outstripped the rising economic resources associated with improved educational levels. The fact that earnings among American workers have not increased substantially, in constant dollars, may also play a role. These generational differences may be especially prevalent among groups who have experienced persistent racial and ethnic employment discrimination and residential segregation (i.e., Hispanics and African Americans). As well, many boomers’ experiences with divorce, including a historically unprecedented rise in divorce rates among Hispanics (Landale, Oropesa, and Bradatan 2006), and other forms of family disruption may have resulted in fewer household resources that otherwise promote homeownership. Whatever the sources of this decline, it is apparent that a smaller share of boomers is approaching later life owning a home than was the case a generation earlier, when their parents were middle-aged. Earnings and Household Income Racial, ethnic, and gender differences are also evident in the financial resources reported by boomers at midlife. Among most midlife individuals, earnings from employment are their most important financial resource, and the largest share of individual and household income results from labor force activity. In addition, earnings shape economic well-being in later life through the accumulation of public and private pension credits and private wealth through savings and financial investments (e.g., ownership of real estate, stocks, and bonds). Statistics based on data from the 2006 ACS suggest that 75–80 percent of boomers are working in midlife, with higher rates of labor force participation among whites and among men irrespective of race or ethnic group affiliation (data not presented here). Although parttime and part-year work is not uncommon, more than half of the boomers in all racial and ethnic groups report working full-time, year-round.4 Men

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TABLE 2-3. Median Earnings for Full-Time Full-Year Workers and Median Household Income, by Race, Ethnicity, and Gender among Boomers in the 2006 American Community Survey Group Non-Hispanic: White African American Asian Hispanic/Latino All men All women Total

Median annual earnings, full-time full-year workers

Median household income

$46,687 $35,217 $44,272 $30,186 $50,310 $35,217 $43,266

$73,050 $46,285 $79,187 $51,316 $70,433 $64,899 $67,415

Note: Calculations based on people aged 42–60 only. Source: Calculated by the authors using 2006 American Community Survey.

are more likely to work full-time year-round (66 percent) than are women (45 percent). A substantial share of earnings differentials evident in any population is a function of the amount of time that individuals devote to paid work activities. An exhaustive examination of these issues is beyond the scope of the current chapter; instead, we focus our attention on an examination of the median personal earnings among full-time year-round workers, who typically share similar profiles with respect to time committed to work. This assessment reveals striking group differences in the compensation received for work even among those segments of the boomer workforce with the most extensive participation (see table 2-3). Among boomers, whites earn the most (median annual earnings = $46,687), while Hispanics earn the least ($30,186). Asians working full-time year-round earn somewhat less than whites ($44,272), while African Americans earn substantially less ($35,217). The lower earnings levels of Hispanics and African Americans reflect the educational differences discussed earlier, as well as restricted employment and promotion opportunities, geographic differences in pay rates, and other factors. Although male and female boomers report similar educational attainments, gender-specific median earnings levels suggest substantial differences in compensation. A typical woman who works full-time year-round earns $35,217, compared to $50,310 for her male counterpart, a difference of 30 percent. These differences may be a reflection of occupational choices, experience levels associated with time spent out of the labor force for child care or other family-related responsibilities, and other factors related to the gendered interpretation of family and work–life experiences, including gender

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discrimination in the workplace. Regardless of the source of these differences by race, ethnicity, and gender, earnings differentials experienced at midlife will be reflected in resource differentials among boomers and their families in later life. An alternative indicator of financial well-being is captured by household income, which reflects the economic resources held by all persons living in the same housing unit. Household income is an indicator of the standard of living generated by the pooled resources of household members and therefore is reflective not only of the income level of work-eligible members but also the composition of the household. High household incomes occur among units that include high-income wage earners but also in households that include more working adults. Low household income occurs when members earn low wages, as well as when few or no members are employed. Some research demonstrates that although the average standard of living experienced by boomers, as a whole, is higher than that experienced by their parents, a higher level of inequality characterizes the household incomes of boomers (Hughes and O’Rand 2004). Table 2-3 provides data that suggest the combination of these forces results in median household incomes that are far lower for African American and Hispanic boomers as compared to white and Asian boomers. African American and Hispanic median household incomes are about one-third less than that of their white counterparts. In contrast, Asian boomers report median household incomes that are about 8 percent greater than the median incomes reported by whites. Further, male boomers live in households with a median income of more than $70,000, while female boomers live in households with a median income of just under $65,000, reflecting the different earnings profiles of men and women, coupled with differences in family structure, number of earners, and level of work participation among those members who do work. For example, women are more likely to live in single-parent, single-earner households, and as reflected in table 2-3, their earnings tend to be lower than that of men even when they work full-time. Wealth and Pensions We cannot know with certainty what late life has in store for the economic security of boomers. However, research suggests that many boomers are not adequately prepared for a secure retirement, and that African Americans, Hispanics, and women are especially vulnerable. For example, based on data from the Health and Retirement Study (HRS), a nationally representative survey of older adults in the United States and a leading resource describing the economic, labor force, and health characteristics of older persons, Lusardi and Mitchell (2006) indicate that a high level of wealth inequality characterizes the leading edge of the boomer cohort, the ‘‘early

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boomers,’’ defined in their study as those persons born between 1948 and 1953. Many early boomers have very little wealth; for example, median net worth among African American early boomers is only $27,000 and is just $56,000 for Hispanic early boomers, compared to almost $200,000 for early boomer whites. These differences reflect lower levels of homeownership, lower values of owned homes, and lower levels of other resources, such as savings and financial investments, among members of these groups. As well, male early boomers report much higher net worth than their female counterparts. For most boomers, but especially for racial and ethnic minority group members, their primary asset is their residence, making them especially vulnerable to fluctuations in the housing market. Low levels of wealth are coupled with limited pension prospects for many boomers. Moore (2006) projects that about half of boomers will be eligible for an employer-sponsored pension at age 62, but eligibility rates are expected to be substantially lower for women than for men, and lower for African Americans and Hispanics than for whites. Projected income received from pensions is also expected to be lower for these groups. Perhaps in response to their perceived constraints in wealth and pension resources, boomers report that they expect to work longer than members of older generations. HRS data reveal that members of the leading edge of the boomer cohort are more likely than previous cohorts to expect to work past age 65 (Mermin, Johnson, and Murphy 2007). U.S. Bureau of Labor Statistics projections also anticipate that a higher labor force participation rate will characterize this generation (Toossi 2005). Among the early boomers who participated in the HRS, males were more likely than females to expect to work past age 65, and African Americans were less likely than others to expect to work that long (Mermin, Johnson, and Murphy 2007). In other words, the groups with lower wealth levels and fewer pension prospects are least likely to expect to work in later life. If these expectations are translated into behavior, patterns of work beyond age 65 may serve to further increase gender, racial, and ethnic economic inequality in retirement among boomers. LIFE EXPECTANCY, CHRONIC DISEASE, AND HEALTH BEHAVIORS AMONG MIDLIFE BOOMERS: DIFFERENCES BY RACE, ETHNICITY, AND GENDER Life Expectancy Racial, ethnic, and gender differences in health profiles and survivorship, or life expectancy, are stubborn reminders of the inequalities that continue to permeate American society. A white infant born at the peak of the baby boom had an expectation of life of seventy-four years if she was a girl, or sixty-seven years if he was a boy. If the infant was African American, she was expected to live only sixty-six years if a girl, sixty-one years if a boy. Improvements in medical interventions and preventive health care have increased expectation of life across all groups, yet gender and race differences persist.5 Although the

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total number of years lived, on average, has shifted upward for all groups, a significant gap between whites and African Americans persists. What this means is that, among the baby boomers, men of all races and African Americans of both sexes disproportionately die before reaching midlife. Moreover, mortality differences continue to affect survivorship throughout adulthood. Consider that white female boomers born in 1957 and fortunate enough to survive to the age of 46 in 2003 are expected to live another thirty-six years, whereas African American female boomers can expect to live an additional thirty-three years. White male boomers had a life expectancy of thirty-two years at age 46, while African American male boomers could expect, on average, only twenty-eight years of additional life (Arias 2007). Chronic Conditions To elaborate further on the well-being of the boomer generation as captured by health status, we address two questions: What do the boomers’ prospects look like for a healthy, disability-free old age? And, in the next section, to what extent are potential late-life health disparities foreshadowed in the health conditions and health behaviors of today’s midlife boomers? Chronic disease not only contributes to premature death but also presents substantial economic costs and burdens in terms of disability, loss of function, and loss of independence. High blood pressure, arthritis, and diabetes are among the most common chronic conditions in later life; further, these conditions have been identified as contributing to disability. Some evidence suggests that these chronic conditions may also be related to cognitive decline (CDC and Merck Company Foundation 2007). Data from the 2006 National Health Interview Survey demonstrate that chronic conditions are differentially distributed across racial, ethnic, and gender groups among midlife boomers (see table 2-4). Three common conditions considered here—hypertension, arthritis, and diabetes—have implications for long-term risk of disability and premature death. Although these conditions are common within the boomer cohort, they are especially prevalent among African American boomers, 39 percent of whom are hypertensive, one-quarter of whom have been told they have arthritis, and 12 percent of whom are diabetic. Hispanics have the highest rate of diabetes (14 percent), and Asians have the lowest rate of hypertension (22 percent) and arthritis (11 percent). White boomers have a high percentage of their members with arthritis (26 percent) and hypertension (27 percent) but a relatively low percentage with diabetes (7 percent). Comparing male to female boomers without respect to race or ethnic group, the only sizable gap that emerges is the higher rate of arthritis among women (28 percent) than among men (21 percent). This pattern is consistent with respect to the higher risk of disability that has been observed among older women as compared to older men.

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TABLE 2-4. Chronic Health Conditions by Race, Ethnicity, and Gender among Boomers in the 2006 National Health Interview Survey Diagnosed by a physician or other health care professional as having: Group Non-Hispanic: White African American Asian Hispanic/Latino Male Female Total

Hypertensiona 27% 39% 22% 23% 29% 27% 28%

Arthritis 26% 26% 11% 18% 21% 28% 24%

Diabetes 7% 12% 10% 14% 9% 8% 9%

a

Respondent was told by a physician or other health care professional two or more times that he or she has high blood pressure. Note: Calculations based on people aged 42–60 only. Source: Calculated by the authors from the 2006 from the National Health Interview Survey.

These indicators suggest that substantial gaps in the prevalence of chronic health conditions exist among boomers. The measures of health conditions provided here are self-reported; respondents are asked if a doctor or other health professional has ever told them they had diabetes, arthritis, or high blood pressure (CDC 2007). Individuals who have not received adequate screening for conditions like diabetes or hypertension or who have not discussed symptoms that might lead to a diagnosis of arthritis with a health provider would not necessarily know that they had these conditions. Actual prevalence rates for these conditions may be higher than reflected here, especially among populations having low or uneven contact with health care professionals. Health Behaviors Smoking, obesity, excessive alcohol consumption, and lack of physical activity reflect aspects of an unhealthy lifestyle that can have significant implications for long-term health, disability, and mortality (Wister 2005). The Centers for Disease Control and Prevention estimates that just three behaviors—smoking, consuming a poor diet, and being physically inactiveare the causes of nearly a third of all deaths in the United States. CDC researchers conclude that ‘‘adopting healthier behaviors, such as engaging in regular physical activity, eating a healthy diet, leading a tobacco-free lifestyle, and getting regular health screenings . . . can dramatically reduce a person’s risk for most chronic diseases, including the leading causes of death’’ (CDC and Merck Company Foundation 2007, 4).

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TABLE 2-5. Unhealthy Behaviors by Race, Ethnicity, and Gender among Boomers in the 2006 National Health Interview Survey

Group Non-Hispanic: White African American Asian Hispanic/Latino Male Female Total

Five or more drinks in one day at least once in the past year

Current cigarette smoker

Physically inactivea

Obeseb

Reports two or more unhealthy behaviors

20% 12% 7% 15% 26% 11% 18%

23% 30% 11% 17% 25% 21% 23%

33% 46% 42% 50% 37% 37% 37%

30% 39% 11% 32% 31% 30% 30%

29% 36% 12% 32% 34% 26% 30%

a

Defined as never engaging in any leisure-time light, moderate, or vigorous physical activity Defined as having a body-mass index (BMI) greater than or equal to 30, based on selfreported height and weight

b

Note: Calculations based on people aged 42–60 only. Source: Calculated by the authors from the 2006 National Health Interview Survey.

Table 2-5 presents information on a set of unhealthy behaviors by population subgroup, based on data from the 2006 NHIS. As a group, nearly one in five boomers engages in risky drinking behavior (i.e., has consumed five or more drinks in a single day at least once in the previous year), and almost one in four was a current smoker. Larger shares (one-third or more) were physically inactive or obese.6 These unhealthy behaviors clearly place many boomers at increased risk of disease, disability, and premature mortality. This risk may be especially high for the 30 percent of boomers who report two or more of these unhealthy behaviors (see the last column in table 2-5). Differences among racial and ethnic groups in these behaviors are evident, but do not point to a consistent pattern of unhealthy behavior among any one group (see Adams and Schoenborn 2006, for a similar conclusion). For example, relatively more white boomers engage in high-risk alcohol consumption (20 percent) compared to any other group, but they are most likely to be physically active. Asians are least likely to engage in high-risk alcohol consumption, to smoke, or to be obese, but 42 percent of them are physically inactive. As a group, African Americans are the most likely to be obese (39 percent) or to currently smoke (30 percent), and many are physically inactive (46 percent), but only 12 percent have engaged in high-risk alcohol consumption. Hispanics are at or below the population average of all unhealthy behaviors except for physical inactivity—fully half of Hispanics report never engaging in light, moderate, or vigorous leisure-time physical activity. However, the fact that 32 percent of Hispanics, and 36 percent of African

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Americans, report engaging in two or more unhealthy behaviors, may place them at potentially higher risk of health consequences associated with lifestyle. Patterns by gender suggest that unhealthy behavior is more common among boomer men than women. Although similar levels of physical inactivity and obesity are evident by gender (approximately one in three for each group), men are somewhat more likely than women to be current smokers, and considerably more likely to engage in high-risk drinking behavior. Furthermore, over one-third of the male boomers, but only about one-quarter of women, report engaging in two or more unhealthy behaviors. Because of these different patterns of unhealthy behaviors, the health consequences realized may take different forms across the subgroups. For example, groups with high obesity levels are at especially high risk for diabetes and heart disease, whereas groups with high rates of smoking are at higher risk for certain types of cancer. Implications for Health Disparities in Later Life A considerable amount of past research indicates that disability levels in later life have declined in recent decades (Crimmins 2004; Manton, Gu, and Lamb 2006). These declines have been traced to changes in health-related behaviors and cohort succession, whereby younger, healthier cohorts are moving into later life replacing less healthy and less affluent persons from earlier cohorts. Looking ahead, we anticipate that disparities in health outcomes among boomers are likely to persist despite potential declines in disability across this cohort as a whole. Differences in rates of hypertension, diabetes, arthritis, and other early-onset health conditions may be amplified among boomers by high levels of participation in unhealthy behaviors (e.g., obesity and low physical-activity levels). Moreover, economic resource differences among some racial, ethnic, and gender groups, as documented earlier, influence health trajectories, with the result that disadvantages cumulate into later life. The implications of having diabetes for higher rates of disability and mortality, for example, may be more unfavorable among individuals with fewer financial resources, limited education, or poorer access to health care services. The quality of life experienced by boomers in later life, and the differences among racial, ethnic, and gender groups in those experiences, will be shaped by the intersection of trajectories in health and in socioeconomic resource accumulation, which together reflect accrued advantages and disadvantages for each group over the life course. DISCUSSION There is a tendency among policy makers and academicians to fail to embrace the heterogeneity of the boomers when considering the aging of this

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generation. It is a mistake to do so (see the discussion in Wilmoth and Longino 2006). In this chapter, we sought to highlight the diverse economic and health characteristics of this group by considering differences and similarities by race, ethnicity, gender, and age. While this large population of middleaged persons lived through and participated in some of the most significant social, political, and cultural changes this country has ever witnessed, the impact of these changes on members of these subgroups is variable. A common theme in the scholarly literature and the popular media emphasizes that boomers are likely to be different from earlier generations in terms of how they live out their retirement years. As one elderly cohort replaces another through the process of cohort succession, past patterns of aging are often not accurate predictors of attitudes and behaviors among members of incoming replacement generations (Myers 2007; Wister 2005). Noting that boomers, on average, are healthier and better prepared financially for later life, many observers suggest that they will continue to lead productive and fulfilling lives well into old age (Freedman 2006/2007; Greenblatt 2007). It is difficult to disagree with this assessment. Boomers have the opportunity to redefine what ‘‘senior citizenship’’ means because they are generally well equipped educationally and otherwise to advocate on behalf of their own redefinitions. However, evidence presented in this chapter suggests that resource differences among segments of this cohort—many of the differences being quite substantial—may challenge the ability of some boomers to realize this optimistic vision. African Americans, Hispanics, and some women may not have as many financial resources as white men during these later years. Moreover, the disability outlook appears to be much more unfavorable for some groups than for others. For some boomers, the later stages of life may greatly resemble the model experienced by their parents. For them, old age may fall well short of the promise embedded in the social movements of their youth that were directed toward the elimination of unequal access to opportunities, resources, and outcomes. As a society, we need to be conscious of the ‘‘boomer stereotype’’ that highlights the advances made in education and medical care, and not lose sight of the fact that a substantial fraction of the boomer generation will still be vulnerable in old age. One aspect of boomer heterogeneity that has been generally overlooked relates to the sizable immigrant population embedded in this cohort. Although space and data constraints do not permit an exhaustive consideration of the immigrant boomer population here, it is well worth remembering that a substantial share of the diversity within the boomer cohort is attributed to immigrants, most of whom were born in Latin America or Asia. Considering the implications of this diversity, then, our attention is drawn not only to factors related to race and ethnicity but also to issues relating to immigration. With the already high levels of first-generation immigrants residing in the United States and the increasing inflows expected in the

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future, understanding the economic and health issues of boomer immigrants takes on added significance, especially given changes to federal and state policy related to public support for older immigrants (Angel 2003). One set of factors that conditions the implications of the financial and health-related profiles discussed here is the myriad of family types in which boomers are embedded. Family relationships—encapsulated in spouses and partners, children, and grandchildren as well as siblings and other extended family members—can be a powerful force in buffering the effects of economic and health-related disadvantage. For example, the standard of living for economically disadvantaged older adults may be improved by combining households with relatives (Goldscheider and Goldscheider 1989). As well, the implications of disability and poor health for participation in activities may be minimized when informal, family-based support and assistance are available. Like finances and health, social capital, defined as the potential to draw upon informal support when in need, is distributed unevenly within the boomer population. Divorce and other forms of marital disruption are more common among boomers than among previous generations; however, most boomers have a marital partner, especially among whites and Hispanics, and relatively few live alone (Eggebeen and Sturgeon 2006). Yet changes in family structure, including historically low fertility rates and late marriage, among African American and Hispanic boomers may jeopardize their ability to draw on informal resources for assistance in later life (Wilmoth and Longino 2006). As the boomers approach later life, primary policy questions have focused on economic support, provision of health care, and the nature of entitlements (Greenblatt 2007). Can the United States continue to provide adequate Social Security and Medicare benefits as the number of seniors explodes over the next twenty years? What are the implications of pulling back from entitlements or redefining the conditions under which benefits are available? Policies such as those promoting a longer worklife are a potential solution for many boomers who are already predisposed to keep working in some capacity and who have the energy and adequate health to continue. For others, however, especially those already on a trajectory leading toward a heavy burden of chronic disease and disability, an extended worklife is unlikely to be a realistic solution to economic shortfalls. Given that certain groups (for example, African Americans, Hispanics, and women) have poorer economic profiles, future adjustments to Social Security and Medicare will need to take into consideration the differential impact of any potential changes. Indeed, anticipated demographic shifts make it likely that the absolute size of the groups who could most benefit from needs-based transfer programs such as SSI and Medicaid will increase just at a time when policy makers and some members of the general public will be inclined to reduce these programs or shift the burden to families or the private sector (Wilmoth and Longino 2006).

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NOTES 1. We use the terms cohort and generation somewhat interchangeably, albeit advisedly, in this chapter. In demographic terms, baby boomers represent a cohort in that they share the timing of their birth (typically dated as 1946–1964). Insofar as boomers also constitute a ‘‘generation,’’ they are thought to share aspects of identity related to a shared cultural history (Alwin, McCammon, and Hofer 2006). The extent to which the history that defines a generation in these terms is, in fact, shared by members of the baby-boom birth cohort is variable by race, ethnicity, and immigrant status. 2. Figures for 2006 were calculated by the authors using data from the 2006 American Community Survey (ACS). Respondents to the ACS may self-identify with more than one race category. Approximately 2 percent of the boomer cohort lists more than one race. Following precedent in the scientific literature, we include only those persons listing a single race in each of the three race categories examined here (white, African American, and Asian). Hispanics may be of any race and may have selected multiple races (e.g., many Hispanics mark both ‘‘White’’ and ‘‘Other’’ in response to the race question). 3. In the ACS, homeowners are identified as people who are either the head of a household or the spouse of a householder, and who live in an owned home. 4. Following convention, full-time year-round work is defined as having worked at least fifty weeks in the previous year and typically working at least thirty-five hours per week. 5. White female children born in 2003 have a life expectancy of eighty years, but that for African American female children is only seventy-six years. For male children, the life expectancy figure is seventy-five years for whites and sixty-nine years for African Americans (Arias 2007). 6. All health behavior assessments were based on self-reports, including obesity, which was based on self-reported weight and height.

REFERENCES Adams, P. F., and C. A. Schoenborn. 2006. Health behaviors of adults: United States, 2002–04. National Center for Health Statistics, Vital and Health Statistics Series 10, No. 230. Washington, DC: GPO. Alwin, D. F., R. J. McCammon, and S. M. Hofer. 2006. Studying baby boom cohorts within a demographic and developmental context: Conceptual and methodological issues. In The baby boomers grow up: Contemporary perspectives on midlife, ed. S. K. Whitbourne and S. L. Willis, 45–71. Mahwah, NJ: Erlbaum. Angel, J. 2003. Devolution and the social welfare of older immigrants: Who will bear the burden? Public Administration Review 63:79–89. Arias, E. 2007. United States life tables, 2003 [electronic version]. Centers for Disease Control and Prevention. National Vital Statistics Reports 54 (14). Bean, F. D., and G. Stevens. 2003. America’s newcomers and the dynamics of diversity. New York: Russell Sage. CDC (Centers for Disease Control and Prevention). 2007. 2006 National Health Interview Survey (NHIS) public use data release, NHIS survey description. Hyattsville, MD: National Center for Health Statistics.

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CDC and the Merck Company Foundation. 2007. The state of aging and health in America, 2007. Whitehouse Station, NJ: Merck Company Foundation. Available at http://www.cdc.gov/aging/saha.htm. Crimmins, E. M. 2004. Trends in the health of the elderly. Annual Review of Public Health 25:79–98. Crystal, S., and D. Shea. 1990. Cumulative advantage, cumulative disadvantage and inequality among elderly people. Gerontologist 30:437–43. Crystal, S., D. Shea, and K. Shreeram. 1992. Educational attainment, occupational history, and stratification: Determinants of later-life economic outcomes. Journals of Gerontology 47:S213–S221. Di, Z. X., E. Belsky, and X. Liu. 2007. Do homeowners achieve more household wealth in the long run? Journal of Housing Economics 16:274–90. Eggebeen, D. J., and S. Sturgeon. 2006. Demography of the baby boomers. In The baby boomers grow up: Contemporary perspectives on midlife, ed. S. K. Whitbourne and S. L. Willis, 3–21. Mahwah, NJ: Erlbaum. Freedman, M. 2006/2007. The social-purpose encore career: Baby boomers, civic engagement, and the next stage of work. Generations 30 (Winter): 43–46. George, L. K. 2003. What life-course perspectives offer the study of aging and health. In Invitation to the life course: Toward new understandings of late life, ed. R. A. Settersten, 161–88. Amityville, NY: Baywood. Gibson, C., and K. Jung. 2002. Historical census statistics on population totals by race, 1970 to 1990, and by Hispanic origin, 1970 to 1990, for the United States, regions, divisions, and states. Population Division Working Paper No. 56. Washington, DC: U.S. Census Bureau. Goins, R. T., M. Moss, D. Buchwald, and J. M. Guralnik. 2007. Disability among older American Indians and Alaska Natives: An analysis of the 2000 Census Public Use Microdata Sample. Gerontologist 47:690–96. Goldscheider, F. K., and C. Goldscheider. 1989. Ethnicity and the new family economy: Living arrangements and intergenerational financial flows. Boulder, CO: Westview Press. Greenblatt, A. 2007. Aging baby boomers. CQ Researcher 17 (37): 865–88. Haaga, J. 2007. Just how many baby boomers are there? Population Reference Bureau, http://www.prb.org/Articles/2002/JustHowManyBabyBoomersAreThere.aspx. Hayward, M. D., and B. K. Gorman. 2004. Long arm of childhood: The influence of early-life social conditions on men’s mortality. Demography 41:97–107. Hayward, M. D., and M. Heron. 1999. Racial inequality in active life among adult Americans. Demography 36:77–91. Hughes, M. E., and A. M. O’Rand. 2004. The lives and times of the baby boomers. New York: Russell Sage and the Population Reference Bureau. Landale, N., S. Oropesa, and C. Bradatan. 2006. Hispanic families in the United States: Family structure and process in an era of change. In Hispanics and the future of America, ed. M. Tienda and F. Mitchell, 138–75. Washington, DC: National Academies Press. Lusardi, A., and O. S. Mitchell. 2006. Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth [electronic version]. University of Michigan, Retirement Research Center, Working Paper No. 2006-114. Manton, K. G., X. Gu, and V. L. Lamb. 2006. Change in chronic disability from 1982 to 2004/2005 as measured by long-term changes in function and health in the

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U.S. elderly population. Proceedings of the National Academy of Sciences of the United States of America 103 (48): 18374–79. Mechanic, D. 2007. Population health: Challenges for science and society. Milbank Quarterly 85 (3): 533–59. Mermin, G. B. T., R. W. Johnson, and D. P. Murphy. 2007. Why do boomers plan to work longer? Journal of Gerontology: Social Sciences 62B: S286–S294. Moen, P., and K. Chermack. 2005. Gender disparities in health: Strategic selection, careers, and cycles of control. Journal of Gerontology: Social Sciences 60B (Special Issue II): 99–108. Moore, J. H., Jr. 2006. Projected pension income: Equality or disparity for the babyboom cohort? Monthly Labor Review 129 (3): 58–67. Myers, D. 2007. Immigrants and boomers: Forging a new social contract for the future of America. New York: Russell Sage. National Center for Health Statistics. 2002. Live births, birth rates, and fertility rates, by race: United States, 1909–2002. Http://www.cdc.gov/nchs/data/statab/ natfinal2002.annvol1_01.pdf. O’Rand, A. 1996. The precious and the precocious: Understanding cumulative disadvantage and cumulative advantage over the life course. Gerontologist 36:230–38. Ruggles, S., M. Sobek., M. Alexander, C. A. Fitch, R. Goeken, P. K. Hall, M. King, and C. Ronnander. 2004. Integrated public use microdata series: Version 3.0 [machine-readable database]. Minneapolis: Minnesota Population Center [producer and distributor]. See http://usa.ipums.org/usa/. Schweitzer, M. W. 1980. World War II and female labor force participation rates. Journal of Economic History 40:89–95. Sykes, L. L. 2003. Income rich and asset poor: A multilevel analysis of racial and ethnic differences in housing values among baby boomers. Population Research and Policy Review 22:1–20. Toossi, M. 2005. Labor force projections to 2014: Retiring boomers. Monthly Labor Review 128 (11): 25–44. U.S. Census Bureau. 2004. Population projections for 2000–2050 by single years of age, by sex, and race and Hispanic origin. Population Projections Branch, Population Division, U.S. Census Bureau. Retrieved November 1, 2007, from http:// www.census.gov/ipc/www/usinterimproj/. ———. 2006. Monthly population estimates by age, sex, race and Hispanic origin for the United States: April 1, 2000, to July 1, 2006 (with short-term projections to dates in 2007). Population Estimates Program, Population Division, U.S. Census Bureau. Retrieved November 1, 2007, from http://www.census.gov/popest/ datasets.html. Wilmoth, J. M., and C. F. Longino. 2006. Demographic trends that will shape U.S. policy in the twenty-first century. Research on Aging 28:269–88. Wilson, A. E., K. M. Shuey, and G. H. Elder Jr. 2007. Cumulative advantage processes as mechanisms of inequality in life course health. American Journal of Sociology 112:1886–1924. Wister, A. V. 2005. Baby boomer health dynamics: How are we aging? Toronto: University of Toronto Press.

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3

A History of Productive Aging and the Boomers W. ANDREW ACHENBAUM

A

ging, according to the Oxford English Dictionary (1971), first entered the English lexicon in 1879. Aged, in contrast, appeared more than four centuries earlier. Old is the most ancient term associated with the language of age. The word has several meanings in Greek and Latin; it has cognates in Etruscan, Sanskrit, and Armenian. Productive aging is a modern term. The earliest U.S. reference I could uncover is found in the Report of the Committee on Economic Security of 1935. ‘‘We deem provision of work the best measure of security for ablebodied workers,’’ the committee declared. ‘‘In placing primary emphasis on employment, rather than unemployment compensation, we differ fundamentally from those who see social insurance as an all-sufficient program for economic security’’ (Committee on Economic Security 1985, 30, 70). It is not clear that the Committee on Economic Security architects of the 1935 Social Security Act actually had elderly workers in mind when they referred to the importance of employment for ‘‘able-bodied’’ workers. Title I (Old-Age Assistance) of that landmark legislation granted up to $30 a month for needy men and women aged 65 and over who met federal and state criteria. Title II (Old-Age Insurance) provided pensions for employees who had contributed to the system; benefits began at age 65. It is likely, then, that employment compensation under Social Security was earmarked primarily for men in their prime—full-time employees aging in the labor force.

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The committee’s presumption that it was aging, not aged, workers who contributed to the nation’s productivity is consistent with assumptions in other key documents published in the 1930s. Consider how the idea of human resources is framed in Recent Social Trends, a survey of American society prepared for President Herbert Hoover that was published in 1933. There, economists envisioned employment opportunities for women, various racial and ethnic groups, and the population over age 16 ‘‘customarily employed.’’ Contributors to Recent Social Trends did not specify the contributions employees past their prime might make to productivity; interestingly, they recognized that fueling consumption patterns among older Americans would spur growth in productivity (Mitchell 1933, 1:274, 1:332–34, 2:805). Neither was there any reference to the positive contributions older workers might make in the labor force in Edmund Vincent Cowdry’s Problems of Ageing (1939), arguably the first handbook of gerontology published in the United States. That the first edition of the Handbook of Aging and the Social Sciences (Binstock and Shanas 1976), issued nearly four decades later, did not refer to ‘‘productive aging’’ offers proof that use of the concept was not yet very widespread by the 1970s. PRODUCTIVE AGING AS A CONTEMPORARY GERONTOLOGICAL PARADIGM Robert N. Butler, M.D., the first director of the National Institute of Aging, probably deserves the most credit for putting productive aging on the gerontological agenda. In his Pulitzer Prize–winning Why Survive? Being Old in America, Butler (1975) excoriated the ‘‘myth of unproductivity’’ in late life. He argued that it led to ‘‘dismal conclusions’’ about older people’s creativity as well as their capacity to contribute to the national good. Seven years later, Butler and Herbert Gleason sponsored a conference on productive aging in Salzburg, Austria, which resulted in an edited volume by that title. Contributors argued that Productive Aging justified ‘‘the notion that we can, and must, express and facilitate our personal and social productivity as we grow older’’ (Hinterlong, Morrow-Howell, and Sherradan 2001, 5). Thereafter, more and more researchers—mainly gerontologists—tried to define the scope and limits of the concept of productive aging. Most commentators agreed with Butler that deploying the term was a way to deflate stereotypes that characterized older men and women as useless, frail, and dependent. There was, moreover, an undeniable economic motif to analyses of productivity. Yet, scholars and federal bodies such as the National Research Council and the Panel to Review Productivity Statistics contended that monetary compensation alone did not embrace all of the dimensions of productive aging (Caro, Bass, and Chen 1993). There was consensus that formal and informal volunteer activities were important facets of productive aging. So was caregiving to the young, the old, and peers. Still, disagreements over definitions of ‘‘productive aging’’ grew as the list of possible items for inclusion lengthened. Where, for instance, did adult

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learning fit in the scheme of things? (Re)training was often necessary if older workers were to remain productive in the marketplace. However, was taking a course on the Bible a productive use of elderly people’s time in terms of building their capacity to serve? Or, to take an extreme case: meditating usually is meaningful to the person who sits silently in contemplation, but is silent prayer productive only insofar as it results in spiritual activity that benefits others? Some scholars worried that various notions of productive aging, with their emphasis on paid (part-time) work, ignored or marginalized the charitable services tirelessly performed by women and minorities (Hinterlong, Morrow-Howell, and Sherradan 2001, 7–8). Not only did competing definitions of productive aging vie for pride of place, but other concepts emerging contemporaneously challenged its claim to being the premier way to rethink the meanings and experiences of growing older. H. R. Moody (2007), among others, proposed explorations into ‘‘conscious aging’’ as a ‘‘holistic line of development’’ representing ‘‘a new form of ‘growth’ in later adulthood.’’ The National Council on the Aging advocated the idea of ‘‘vital aging’’ as a way to underline the capacity of every individual to celebrate and engage in the gift of life (Achenbaum 2005b). The most robust alternative to research on productive aging was Successful Aging, the MacArthur Foundation study spearheaded by John W. Rowe, M.D., and Robert L. Kahn. ‘‘Successful aging’’ emphasized ‘‘the positive aspects of aging’’ by moving ‘‘beyond the limited view of chronological age and to clarify the genetic, biomedical, behavioral, and social factors responsible for retaining—and even enhancing—people’s ability to function in later life’’ (Rowe and Kahn 1998, 38). According to Rowe, Kahn, and their collaborators, three factors—avoiding disease and disease-related disability, maintaining high cognitive and physical functioning, and enjoying an active engagement with life—defined successful aging. With MacArthur support and a splendid article in Science, one might have anticipated that successful aging would supplant productive aging as the focus of gerontological inquiry. ‘‘Once in a great while an outstanding health book comes along that should be featured on every radio and television talk show and in every major newspaper,’’ observed Jane Brody, who writes on personal health for the New York Times, ‘‘yet it fails to attract the attention it deserves because it isn’t ‘sexy’ enough’’ (Brody 1998, B15). Brody thought Successful Aging was such a book. Even gerontological lexicons had difficulty deciding where and how to catalog the concepts of ‘‘productive’’ and ‘‘successful’’ aging. The Dictionary of Gerontology (Harris 1988) discussed successful aging under its entry for ‘‘life satisfaction.’’ Successful aging was allocated three pages in Key Words in Sociocultural Gerontology (Achenbaum, Weiland, and Haber 1996), but the compilers omitted productive aging. Over time, the lines of convergence and divergence between productive aging and successful aging became clearer. Both sought to extol the potential

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of older adults to contribute to two mainstream values much esteemed in American culture. In debunking late-life stereotypes, proponents of productive aging and successful aging often broadened the boundaries ascribed to the middle decades of the life course. They did so by claiming that the constructive activities and positive outlooks of middle-aged men and women extended well into a period of life traditionally associated with obsolescence and decline. Yet, according to Scott Bass and his colleagues, there was a fundamental difference: ‘‘In productive aging, the emphasis is on the role older people can play in society; in successful aging, the emphasis is on individual physiological and psychological capacity and process’’ (Caro, Bass, and Chen 1993, 7). Others concurred. Successful aging focused on individual aging, particularly life satisfaction and efforts to prolong healthful aging longer in life. Productive aging, in contrast, dealt with the contributions older Americans can and do make to societal well-being through working, volunteering, and engaging in other paid and unpaid endeavors (Wykle, Whitehouse, and Morris 2005; Caro, Bruner-Canhoto, Burr, and Mutchler 2005). There are clusters of researchers refining the notion of productive aging throughout the United States. A few examples suffice. Investigators at the Gerontology Institute at the University of Massachusetts–Boston are constructing instruments to measure motivation ‘‘for productive activity separately from motivation for activity generally’’ (Caro, Bruner-Canhoto, Burr, and Mutchler 2005, 21). In the Center for Social Development at the George Warren Brown School of Social Work at Washington University, as well as at the Urban Institute in Washington, D.C. (Morrow-Howell, Hinterlong, and Sherradan 2001), researchers have been designing schema for galvanizing productive behavior in later years. Marc Freedman adopted some applications of productive aging in operationalizing Civic Ventures. Denise Park’s Productive Aging Laboratory at the University of Illinois focuses on cognitive and cultural differences in old age. Robert Butler (2000) at the International Longevity Center pursues his research agenda of seeking to promote productive aging and to extirpate ageism, one of the chief obstacles to recognizing the resources of late life. The University of Washington’s de Tornyay Center for Healthy Aging (2007) collects videos related to productive aging. Imaginative projects addressing the challenges and opportunities of productive aging are also under way beyond the academy and think tanks. To wit: Yad Sarah (Jewish Virtual Library) in Israel provides counseling and training programs to enable older volunteers to serve largely elderly clients. Corporate executives cite the work of scholars such as Nancy MorrowHowell as they take steps to promote productive aging by offering greater options in the timing and types of retirement benefits, launching wellness programs, making job modifications to permit fuller worksite flexibility, and adjusting the corporate culture to create less devaluation of age and more opportunities for older workers (Mitchell 2006). The National Association of State Units on Aging (2007) has collected data on best practices,

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customized training and technical assistance, and facilitated peer-to-peer interactions through its Center for State Promotion of Productive Aging. The Reverend Jim Hughes has created Productive Aging Resources to educate ‘‘service-based’’ senior adult ministries. This recent flurry of interest in productive aging (as well as ‘‘successful,’’ ‘‘conscious,’’ and ‘‘vital’’ aging) is no historical accident. As long as gerontology remains, in James Birren’s memorable phrase, ‘‘data rich and theory poor,’’ researchers on aging will embrace new paradigms and look for fresh ways of seeing the big picture. Advancing the idea of productive aging, H. R. Moody (2001) notes, serves many purposes. It provides a healthy antidote to the discredited ‘‘disengagement theory,’’ as well as earlier images of elders as consumers of national resources rather than contributors to the commonweal. A more recent shibboleth impels intellectual engagement. Some of those engaged in basic and applied research on productive aging are reacting to stalwarts in the generational-equity debate of the 1980s who claimed that the elderly were ‘‘greedy geezers.’’ Older Americans, it was argued, selfishly drained the economy, thereby shortchanging younger cohorts (especially minorities) to future claims on entitlements. As a paradigm, productive aging might contribute to theory-building in the social sciences. We have already noted its complementarities with successful aging. It also intersects with various forms of the ‘‘political economy of aging’’ and the ‘‘moral economy of aging.’’ Insofar as feminists criticize its implicit affirmation of a gendered Protestant work ethic, they demand revised concepts of productive aging that mesh with postmodern, genderneutral notions of reflexivity and relativity. From a historian’s perspective, however, how is it possible for productive aging to be viewed as a modern, much less postmodern, concept? To cut to the chase: for virtually all of recorded history, older men and women were productive. Those who did not work did not survive very long. The historical treasure trove, moreover, is full of examples of elders as volunteers, pro bono public servants, caregivers, even contemplatives. After surveying the historical record, we must return to the question of what is potentially ‘‘new’’ about productive aging as a phenomenon and a paradigm. PRODUCTIVE AGING, PAID AND UNPAID, IN PAST TIMES Most historians believe that human civilization began in the Middle East sometime between 7000 and 35,000 B.C.E. Recent archeological findings, however, suggest earlier beginnings in Africa. In any event, the origins of humankind lie in hunter-gatherer societies. Given their limited natural and technological resources, probably few survived infancy and childhood diseases. Still, there is evidence suggesting that a small percentage lived to be at least fifty years old, some even reached their seventh decade (Robine et al. 2006). Productive aging in preagricultural societies meant participating

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in unpaid activities: sharing wisdom, performing domestic chores, and staying healthy. Doing otherwise was as risky for the very old as for the very young. Unproductive, often decrepit, elders were cannibalized in Africa, Oceania, and South America (Minois 1987). The formation of agricultural communities did not affect the scope of productive aging, but it did alter generational stakes in controlling property. Elderly property owners who retained possession of their land usually worked; there are few instances of absentee landlords in ancient history. As in the Neolithic era, scarcity of food, inhospitable climates, and barren landscapes made older people vulnerable, especially if they were poor or ill. Aged women who ceased to be productive were given little assistance, though in places where female goddesses were venerated, older females benefited from their devotions to the Divine Feminine (Simmons 1945; Lerner 1986). The Bible, one of our major sources of information about productive aging in the Classical era, offers bimodal evidence. Even if the longevity of the Patriarchs is grossly exaggerated, older men played critical roles in ritual, politics, and prophetic traditions. Elders represented the twelve tribes of Israel. Whereas Moses merely took advice from his Council of Seventy Elders, old men managed affairs in Jerusalem and during the Diaspora (Gottheil and Krauss 2007). Yet the Psalms record the plaint of those who felt abandoned on account of old age. Hebrew Scripture and the New Testament exhort the young to care for widows and orphans. Not all older women were marginal figures, however, as attested by the examples of Sarah giving birth to Isaac long past menopause and Anna, a widow for eight decades, praying daily in the Temple to see the Messiah. The ancient Greeks honored older people with sufficient wealth and mental acuity to contribute to their city-states. Some heirs of the Muses produced their most creative work past the age of 60. Sparta had a gerusia, consisting of twenty-eight men and two kings over age 60. Rome, in contrast, was ruled mainly by men in their prime (40s and 50s) with the proper lineage (Parkin 2003; Beauvoir 1972). Negative evidence suggests that Romans were expected to remain productive as long as their health permitted. When they became obsolescent, they were subject to the death of Sexagenarius de Ponte—throwing the 60-somethings off a bridge. It is worth noting that this practice was embedded in the legend of the Hyperboreans and the Padeans of India and accounts of senicide from Central Asia and the isle of Ceos. It is difficult to reconstruct a complete picture of productive aging in the Middle Ages. Renaissance Venice (1450–1630) provides the best case study. There, old age was thought to begin at age 40, but many of the elites lived at least thirty more years. Venice was a gerontocracy: the doge typically assumed office at age 72. (Renaissance popes, in contrast, were on average age 54 when they ascended to the throne of St. Peter and ruled for about a

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decade, assisted by cardinals of their cohort. Henry VIII died at 56, but he lived longer than all except one of the kings of England during the fifteenth and sixteenth centuries.) Though frail, most doges surrounded themselves with peers, who even in their 80s commanded the military and delegated responsibilities to men from influential families who from the age of 30 were rising from office to office to significant seats of power (Finlay 1980; Achenbaum 2003). Britain offers the best glimpse of productive aging in the late medieval period among ordinary people. Here as elsewhere, men and women sometimes attained old age, but it was not a frequent phenomenon. Older men worked until death as common laborers or yeomen farmers. Retirement was uncommon, limited to a few privileged courtiers. Elderly women typically outlived their spouses; when incapable of making ends meet, they relied on family members for support. Expected to care for kin and perform domestic chores in return for food and lodging, theirs was unpaid productive aging (Kertzer and Laslett 1995; Rosenthal 1996). Medieval demographic and socioeconomic patterns extended into the early modern period. Most elders worked until they died. Men were farmers or shopkeepers. Women performed domestic tasks. Mutual responsibilities to and with kin kept the aged productive in the household economy. Their efforts, in fact, made it possible for other family members to earn money outside the home. With the dawn of the urban-industrial era, improvements in science, medicine, and public health increased life expectancy. As more and more people survived to 20, the incidence of disability and chronicity rose over the life course. In the eighteenth century, for instance, a 50-year-old manual laborer had half the work capacity of a 25-year-old. He had a third the capacity at 60 and 10 percent a decade later (Fogel 2004, 2, 8, 92). Accidents and chronic ailments curtailed production, paid and unpaid, for many in their prime. The deleterious impact of disability increased with the coming of advancing age. In addition to demographic shifts, new modes of production began to change the economic productivity of older workers. Farming remained the primary source of employment for elderly men on both sides of the Atlantic until the late nineteenth and early twentieth centuries. Farming afforded an ideal setting for productive aging. Even farmers who were advanced in years could perform light tasks, supervise other laborers, manage the books, and share with others their knowledge of the seasons, crop rotation, horticulture, and animal husbandry. All this changed with the new industrial order. Clocks set the pace in factories. Quotas determined output. Experience mattered less than efficiency. Bureaucratic procedures replaced personal connections in obtaining and maintaining jobs. When the performance of older workers slackened, or they became injured or disabled (roughly a fifth of all employed by railroad and steel companies suffered a disabling accident

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within three years on the job), or when plants shut down, the aged were discharged as obsolescent (Achenbaum 1978; Haber and Gratton 1994). During the early phases of industrialization, the superannuated were treated like the disabled: both groups were considered unproductive. They begged outside factory gates and in saloons. Some older workers on both sides of the Atlantic were given gratuities for faithful service in the last third of the nineteenth century. Economic historians contend that these early corporate and union pensions were actually a convenient way to improve the overall productivity of younger workers (Achenbaum 1983). The rate at which older workers voluntarily or (more likely) involuntarily left the labor force rose during the first third of the twentieth century. The exodus of older workers from business and manufacturing concerns increased economic dependency in late life, as it diminished their likelihood for being paid to be productive. The work histories of aging women during the urban-industrial era differed from those of aging men. Most women did not work long outside the home, though percentages varied by ethnicity and race. Rarely did females’ salaries exceed the earnings of males their age. Young women who secured paid employment became schoolteachers or nurses or worked as clerks in shops and commercial buildings. Upon marriage, young women by and large confined themselves to the household, engaging in unpaid but productive activities. In the prime of life, they raised children and performed domestic chores. Many widows, out of necessity, reentered the labor force: they opened their homes to boarders or ran saloons in ethnic neighborhoods (Bell 1944). Managers considered them too old to work as clerks or secretaries. Race and ethnicity were barriers for opportunities for employment, so black and immigrant older women generally settled for menial tasks and menial pay. Disability precluded productive aging at advanced ages. Demographic and economic trends evident in the nineteenth century accelerated in the twentieth, changing the faces of productive aging. Life expectancy increased in advanced industrial nations as well as in developing countries. In many places, including the United States, men and women over the age of 85 constituted the fastest-growing segment of the population. At the same time, morbidity and mortality patterns altered. Chronic conditions were less widespread than a century earlier. Major causes of death changed in the United States. Tuberculosis accounted for a third of all deaths in 1860, to be surpassed forty years later by pneumonia. By 1970, a third of all deaths of older Americans were attributed to heart disease, double the percentage caused by cancer (Robine et al. 2006, 156; Fogel 2004, 111; Walford 1983, 8). The pool of healthy elders who putatively might engage in productive aging had grown enormously. Yet most of the twentieth century witnessed the golden age of retirement. The introduction of social insurance systems around the world, often operating in concert with plans existing in the private sector, assured most

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workers of at least a minimal standard of living and access to health care in later years. Provisions varied by gender (women typically moved in and out of paid employment, were paid less for comparable work than men, and lived longer) and race (minorities generally had lower-paid jobs, less access to retirement and health care benefits, and a greater incidence of disabilities in midlife) (Achenbaum 2005a; Johnson 2005). That said, retirement packages generally were enough to entice many to spend their remaining years in pursuit of leisure, engaging more in consumption than production. By the beginning of the current millennium, new trends in paid productive aging were taking shape. Several factors were at play. Some, who presumed that growing numbers of elders were a drag on the economy, felt that population aging was a time bomb; a nation of elders in the making threatened the solvency of social-insurance benefits for later cohorts. Others contended that increasing productivity was the key to economic prosperity and saw older people as a potential resource, not a burden. Meanwhile, the aged themselves adapted to new incentives to be productive. Growing numbers of older people were willing and able to return to the workforce on a part-time basis. Companies, realizing the experience and loyalty of elders, began to design flexible options that were mutually beneficial to employers and employees (Goldberg 2000; Riley, Kahn, and Foner 1994). And as we shall see, there were boundless opportunities for unpaid contributions in the voluntary sector. ‘‘Unretirement’’ paid off: increasing older people’s productivity sustained prosperity. A BRIEF HISTORY OF VOLUNTEERING AS PRODUCTIVE AGING Examples from U.S. history demonstrate the important contributions older people make to their fellow citizens as unpaid volunteers in their local and national communities, religious institutions, and a host of civic organizations. French aristocrat Alexis de Tocqueville, touring the United States 170 years ago, understood that ‘‘voluntary associations’’ provided the social cohesion that made democracy in America possible: In no country in the world has the principle of association been more successfully used or applied to a greater multitude of objects than in America.. . . In the United States associations are established to promote the public safety, commerce, industry, morality, and religion. There is no end which the human will despairs of attaining through the combined power of individuals united in society. (1945, 1:198–99)

From the early days of the republic, older Americans volunteered their talents and energy to intergenerational and intragenerational endeavors. Every age group had to contribute to the public good, observed an orator at the opening of a canal on July 4, 1825, ‘‘all the vigor of youth, the strength and firmness of manhood, and the wisdom of age’’ (Achenbaum 1978, 9).

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All sorts of voluntary associations enabled individuals to apply their talents through social-service agencies. Religious congregations and secular organizations in particular helped immigrants assimilate to urban-industrial America. The elderly were instrumental in establishing such institutions. Felix Adler, the head of the New York Society for Ethical Culture until he died at the age of 82, for instance, solicited his adherents to sponsor Visitor Nursing (a program absorbed by the city’s public health network) and a free kindergarten for children of working parents (Achenbaum 2006/2007). As documented elsewhere in this volume, older Americans participate in literally thousands of faith-based ventures and government-sponsored initiatives to help children, the sick, and the needy. Older volunteers are indispensable in attending to the needs of patients in hospitals. Elders typically organize neighborhood watches. They lead grassroots environmental interest groups, which in turn link to similar bodies around the world. Senior Corps oversees the Retired Senior Volunteer Program (RSVP), Foster Grandparents, and the Senior Companion Program, which attract more than 500,000 senior citizens to serve the commonweal (Senior Corps 2006). Older Americans have been political activists since the colonial period. In the wake of the Glorious Revolution of 1688, mature males of property and standing served as judges, justices, and lawmakers, charged with adjusting political ties in their counties and provinces. Schoolchildren are taught to praise the virtues of the ‘‘Young Men of the Revolution,’’ but sages such as Benjamin Franklin and Oneida chief Oskanondonha enunciated many of the issues debated as the Constitution was framed. Similarly, leaders of the abolitionist movement included elders such as Frederick Douglass, Harriet Tubman, and William Lloyd Garrison. The struggle to abolish slavery prompted the first feminist movement, which relied on the seasoned judgment of Lucretia Mott, Emma Willard, and Elizabeth Cady Stanton, among others. Another cohort of older women—including Susan B. Anthony and Charlotte Perkins Gilman—advanced the campaign for women’s rights at the end of the century. Older Americans have been advocates of social change throughout the twentieth century. Young men joined unions led by veterans of productivity such as Samuel Gompers and George Meany. Francis Townsend mobilized millions of senior citizens in the depths of the Great Depression to plead for relief from poverty. When forced to retire, Maggie Kuhn created the Gray Panthers, which resisted injustice and discrimination against the elderly, as well as against women and minorities. Older people have also played a critical, productive role in promoting adult learning. Josiah Holbrook’s Lyceum Movement in 1826 brought such venerable orators as Ralph Waldo Emerson and Oliver Wendell Holmes to rural communities. Aging leaders in urban centers and rural settlements took the initiative in establishing libraries, particularly after Andrew Carnegie, aged 67, earmarked generous funds for their construction. Originally

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designed for female Methodist Sunday School teachers, the Chautauqua Movement of 1874 became the prototype for modern-day Elderhostels. Even this brief historical overview illustrates the range of volunteer activities that have engaged older Americans throughout our national experiences. ‘‘From the very beginning our people have markedly combined practical capacity for affairs with power of devotion to an ideal,’’ observed President Theodore Roosevelt in 1902. ‘‘The lack of either quality would have rendered the possession of the other of small consequence.’’ Older Americans who volunteer to lead or to participate in causes to advance social, political, educational, and community-based ideals engage in productive aging. WHAT MAKES PRODUCTIVE AGING NOVEL? So what makes ‘‘productive aging’’ novel? It cannot be that we are in the presence of the first cohort of older Americans engaged in productive activities. The historical record makes clear that from the beginning of human civilization the elderly have been productive out of self-interest: their very survival depended on the real and ascribed value of their contributions to others in their community. Self-interest, however altruistic in intent, motivated the aged to do unpaid work and to volunteer, and their efforts freed others to accomplish other tasks vital to the well-being of the community. Researchers at Washington University contend that ‘‘productive aging, like most emergent policy concepts, has been characterized by advocacy and empirical work more than by theoretical development’’ (Morrow-Howell et al., 260). Marc Freedman’s Experience Corps and Civic Ventures are perfect examples of what is possible when American pragmatism, social capital, and innovative risk-taking are combined under the banner of productive aging: ‘‘These efforts are part of the growing ferment of entrepreneurial efforts that are blending public and private financing and creating new roles for Americans in the last third of life’’ (Freedman 2001, 254). Gerontologists have been applying ideas from their own laboratories and the marketplace of ideas since research on aging emerged as a field of inquiry. Thanks to simple technological innovations, for instance, older Americans can live in barrier-free, safe homes (Achenbaum 1995). So what makes productive aging any different? Crafting a concept of productive aging grounded in theory, in my opinion, would ensure the robustness and durability of the idea that older people have the capacity and experiences to produce distinctive contributions for the well-being of their environment (however broadly understood). Nancy Morrow-Howell and her associates at Washington University itemize six categories that must be part of any middle-level theory of productive aging (Morrow-Howell et al. 2001, 275–76): • Sociodemographics • Public policy • Individual capacity

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• Institutional capacity • Productive behaviors • Productivity outcomes

To this list I would add two other categories. First, I would ask biomedical researchers to join the conversation. For far too long, the very investigators who advocate multidisciplinary research on aging have separated themselves into tribal cells. In an age of specialization, wherein disciplines are barely worthy of the designation, I fully acknowledge that I do not understand the mystifying details emanating from the Genome Project. But I also know that fundamental areas of the biological sciences—such as brain research—are truly frontiers that demand the attention of investigators and nonscientists alike. Science provides new grounds for claiming that ‘‘old dogs can learn new tricks.’’ Incorporating the scientific basis for understanding self-interest and altruism, in addition to explicating how older brains process and assimilate new information, would benefit any theory of productive aging, particularly one meant to spur additional research and to attract public interest. Second, any theory of productive aging must make it a priority to confront individual and institutional ageism. No decent human being would demean another person by making a racist, sexist, homophobic, religious, or ethnic slur. Laws protect people against discrimination on the basis of race, gender, sexual orientation, ethnicity, religion, and disability. Comparable laws also exist to prevent age-based disparities and prejudicial remarks, but they are less effective. Researchers have a choice to make. If they believe that demography is destiny, then they can perpetuate the notion that population aging is, in and of itself, a curse masquerading as a talisman of human progress. The countertactic is to begin with the premise that productivity is the engine of prosperity. In this scenario, a failure to provide opportunities, on theoretical and empirical grounds, for those older people willing and able to participate in paid work or as volunteers is a waste of social capital. Just as nineteenth-century canal builders needed the gifts of all age groups to serve the public good, so too can we ill afford to squander the resources of age. The best way to build theories is to take theory-building seriously. Still reeling from the demise of many attempts to construct knowledge-based paradigms in gerontology, researchers feverishly grasp at the latest concept to come along. Productive aging offers more than a temporary guidepost for involving older Americans in paid and unpaid activities. It can be a way to knit much of the gerontological community together. REFERENCES Achenbaum, W. Andrew. 1978. Old age in the new land. Baltimore: Johns Hopkins University Press. ———. 1983. Shades of gray. Boston: Little, Brown.

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———. 1995. Crossing Frontiers. New York: Cambridge University Press. ———. 2003. (When) Did the papacy become a gerontocracy? In Societal impact on aging: Historical perspectives, ed. K. Warner Schaie and W. Andrew Achenbaum. New York: Springer, 204–31. ———. 2005a. Aging and changing. In The Cambridge handbook of age and ageing, ed. Malcolm L. Johnson. Cambridge: Cambridge University Press, 21–30. ———. 2005b. Older Americans, vital communities. Baltimore: Johns Hopkins University Press. ———. 2006/2007. A history of civic engagement of older people. Generations 30 (Winter): 18–23. Achenbaum, W. Andrew, Steven Weiland, and Carole Haber. 1996. Key words in sociocultural gerontology. New York: Springer. Beauvoir, Simone de. 1972. The coming of age. New York: G. P. Putnam & Sons. Bell, Thomas. 1944. Out of this furnace. Pittsburgh, PA: University of Pittsburgh Press. Binstock, Robert H., and Ethel Shanas, eds. 1976. Handbook of aging and the social sciences. New York: Van Nostrand Reinhold. Brody, Jane E. 1998. A valuable guide to successful aging. New York Times. April 14. Butler, Robert N. 1975. Why survive? Being old in America. New York: Harper & Row. ———. 2000. Productive aging: Live longer, work longer. Paper presented to the World Congress on Medicine and Health, Hanover, Germany, September 21. Caro, Francis A., Scott A. Bass, and Yung-Ping Chen. 1993. Introduction to Achieving a productive aging society, ed. Scott A. Bass, Francis Caro, and Yung-Ping Chen, 3–12. Westport, CT: Auburn House. Caro, Francis A., Laney Bruner-Canhoto, Jeffrey Burr, and Jan Mutchler. 2005. Motivation for active aging: Results of a pilot study. Unpublished paper. Committee on Economic Security. 1985. The report of the Committee on Economic Security. 50th anniv. ed. Washington, DC: National Conference on Social Welfare. Cowdry, Edmund Vincent, ed. 1939. Problems of ageing. Baltimore: Williams & Wilkins. De Tornyay Center for Healthy Aging, University of Washington. 2007. Resources: Video collection. Http://www.agingcenter.org/resources-video.asp. Donadio, S., ed. 1988. The New York Public Library book of 20th-century American quotations. New York: Warner Books. Finlay, Richard. 1980. Politics in renaissance Venice. New Brunswick, NJ: Rutgers University Press. Fogel, Robert W. 2004. The escape from hunger and premature death. New York: Cambridge University Press. Freedman, Marc. 2001. Structural lead: Building new institutions for aging America. In Morrow-Howell, Hinterlong, and Sherradan 2001, 214–22. Goldberg, Beverly. 2000. Age Works. New York: Free Press. Gottheil, Richard, and Samuel Krauss. 2007. Gerusia. JewishEncyclopedia.com, http:// www.jewishencyclopedia.com/view.jsp?artid=190&letter=G. Haber, Carole, and Brian Gratton. 1994. Old age and the search for security. Bloomington: Indiana University Press. Harris, Diana K. 1988. Dictionary of gerontology. Westport, CT: Greenwood Press. Hinterlong, James, Nancy Morrow-Howell, and Michael Sherradan. 2001. Productive aging: Principles and perspectives. In Morrow-Howell, Hinterlong, and Sherradan 2001, 3–18.

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Johnson, M. L., ed. 2005. The Cambridge handbook of age and aging. Cambridge: Cambridge University Press. Kertzer, David, and Peter Laslett. 1995. Aging in the past. Berkeley: University of California Press. Lerner, Gerda. 1986. The creation of patriarchy. New York: Oxford University Press. Minois, Georges. 1987. History of old age. Chicago: University of Chicago Press. Mitchell, Kenneth. 2006. Productive aging: The new life stage. World at Work Journal vol 15, (2006, July): 62–72. Mitchell, William, ed. 1933. Recent trends in the United States. 2 vols. New York: McGraw-Hill. Moody, H. R. 2001. Productive aging and the ideology of old age. In Morrow-Howell, Hinterlong, and Sherradan 2001, 247–62. ———. 2002. Conscious aging: A new level of growth in later life. Http://www. wellnessgoods.com/consciousagingnewlevel.asp. Morrow-Howell, Nancy, James Hinterlong, and Michael Sherradan, eds. 2001. Productive aging: Concepts and challenges. Baltimore: Johns Hopkins University Press. National Association of State Units on Aging. 2007. State promotion of productive aging. http://nasua.org/productiveaging.cfm. Parkin, Timothy G. 2003. Old age in the Roman world. Baltimore: Johns Hopkins University Press. Riley, Matilda White, Robert L. Kahn, and Anne Foner. 1994. Age and structural lag. New York: John Wiley & Sons. Robine, Jean-Marie, Elaine M. Crimmins, Sakao Horiuchi, and Zeng Yi. 2006. Human longevity, individual life duration, and the growth of the oldest-old population. Dordrecht, The Netherlands: Springer. Rosenthal, Joel T. 1996. Old age in late medieval England. Philadelphia: University of Pennsylvania Press. Rowe, John W., and Robert L. Kahn. 1998. Successful aging. New York: Pantheon. Senior Corps. 2006. Senior Corps programs. Http://www.seniorcorps.gov/about/ programs/index.asp. Simmons, Leo W. 1945. The role of the aged in primitive societies. New Haven, CT: Yale University Press. Tocqueville, Alexis de. 1945. Democracy in America. 2 vols. (1836–1840). Trans. Phillips Bradley. New York: Vintage. Walford, Roy L. 1983. Maximum life span. New York: W. W. Norton. Wykle, May L., Peter J. Whitehouse, and Diana L. Morris, eds. 2005. Successful aging through the life span. New York: Springer.

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The Boomers and Their Economic Prospects KAREN C. HOLDEN

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ittle economic news is reported these days without conclusions being drawn about the implications for the economic prospects of future retirees. Declines in the stock market lower the value of personal savings accounts and, potentially, jeopardize the funding status of defined benefit pension plans and the annuitized value of defined contribution plan accounts. Rising consumer prices threaten to reduce the real (consumption) value of current and potential retirement income that is not automatically adjusted for inflation. Slower wage growth threatens current income and future earnings prospects of families and individuals. Rising unemployment may lead to the loss of employer-provided pension coverage and the consequent cessation of employer contributions to defined contribution accounts or the freezing of service credits and earnings used to calculate defined benefit plan benefits. Rising unsecured consumer debt is taken as a signal of consumers’ preferences for current over future consumption with the consequent shift of income (through borrowing) from the future (and retirement) to the present. Borrowing clearly reduces the potential for new savings, but it may also lead to borrowing against retirement savings already made. The reverse of these economic events—a rising stock market, growth in employment and wages, reduced willingness to borrow by consumers—has had and would have beneficial effects on incomes of families and individuals, increasing their ability to save for retirement and growing their past

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savings for a more secure retirement. Legislation that offer new types of individual retirement accounts (IRAs) and raises limits on tax-deferred account contributions allow those in their peak earnings years to save more. Improved prescription drug benefits in public and private plans means retirement savings will not always have to fully cover those. Tighter regulations on insurance and on scams means that fewer will see their savings disappear. THE BOOMERS’ EARLY YEARS: A PERIOD OF PROSPERITY The boomers, commonly defined as those born between 1946 and 1964, were born during a period of relative prosperity. Indeed, what became known as the ‘‘Easterlin hypothesis’’ argues that the boom in births was due in part to the relatively high incomes in the immediate post–World War II period of the relatively small cohort of young adults entering the workforce and forming families. The parents of the boomers were relatively well off compared to the economic status of the previous generation they observed when they themselves were young teens (Easterlin 1966). Postwar income growth and the higher consumption made possible by the lifting of war rationing encouraged family formation and larger families. The baby boomers were born in a period of relative prosperity, and from birth through to their current standing on the cusp of retirement, this larger generation has placed additional demands on public services. Educational systems at all levels faced mounting pressure as this large cohort entered school and went on to college. Penner (1998) argues that the growth in educational expenditures ‘‘contributed disproportionately to the growth of total state and local government in the 1952–75 period, accounting for 46 percent of the increased share of GDP [gross domestic product], due to the need to educate the baby boomers.’’ College enrollment expanded as the GI Bill enabled increased college enrollment among returning veterans, including the parents of boomers, and continued to do so as the next generation entered and completed college at rates higher than had their parents (Finberman and Dolbin-MacNab 2006). After 1975, education expenditures stabilized (Penner 1998) as the baby boomers had largely completed their education and moved into their working-age years (see figure 4-1). On average, the baby boomers have enjoyed higher earnings and family incomes than did their parents (Poulos and Nightingale 1997), although this was in the face of higher unemployment rates (Russell 1982) and came about in part because of the earnings contributed by the higher labor force participation and earnings of wives (Blau, Ferber, and Winkler 1998). Homeownership rates grew among the baby-boom cohort and—perhaps in part because this large working-age cohort provided relatively low perperson financing for services to the smaller cohort of their retired parents—taxfavored retirement options and retirement services expanded during the 1980s and 1990s (Mitchell 2000).

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FIGURE 4-1. Baby Boomers Passage through Time: Age Distribution of U.S. Population, 1965, 1979, 2000, 2020 Source: Author’s calculation from U.S. Census Bureau data and projections.

Employer-provided pension coverage grew, reaching a peak of just less than 60 percent of the full-time workforce. Amendments to the Social Security Act in 1972 and 1977 instituted important automatic adjustments in benefit calculation and payouts of the Social Security system. Poverty rates fell among the elderly, and Social Security and employer-provided pensions accounted for an increasing share of the income received by the 65-and-over population. The labor force participation of men 60–69 declined steadily during the last three decades of the twentieth century, due to older workers choosing to take some of their greater prosperity as leisure (Quinn 2000). Greater retirement security for the baby-boom cohort compared to that of the previous generations seemed likely (Congressional Budget Office 1993). EARLY AND LATER BABY BOOMERS: THEIR DIFFERENT EXPERIENCES But there were early concerns that all would not be well in retirement—perhaps not even relatively well compared to their parents—for the baby-boom cohort. Having witnessed the effect of the larger cohort on the demand for education and employment-related services, it was apparent that their passage into retirement would present comparable challenges to public services, both to retirement income systems and to programs providing services to the elderly. There was also early evidence that the economic experiences of the babyboomer cohort had been and would continue to be different for the ‘‘early boomers’’ and the ‘‘later boomers.’’ The first group is generally identified as those born from 1946 to about 1953, the second group as those born during the second half of the booming birth period. The first group, often also labeled the ‘‘leading edge’’ of the boomers to emphasize their role as the first to overload social services and economic institutions, entered schools as states and municipalities first began to expand and fund facilities to

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accommodate them as students. Subsequently, they were the leading edge of a larger cohort of workers, on average more highly educated than were members of the relatively small cohort of workers they followed. The later boomers, by contrast, entered school systems that were already strained physically and fiscally by their older schoolmates and then entered the labor market, further expanding an already enlarged cohort of workers. This same distinction in the experience of these two subcohorts is reflected in the predictions about the baby boomers’ retirement security. Once again the leading edge of the baby boomers will be the first of the cohort to interact with retirement systems that may be anticipating the large cohorts of retirees but have not yet felt the effects of the larger demand on retirement systems. The ‘‘trailing edge’’ will encounter retirement systems that have begun to face the retirement challenge presented by the earlier baby boomers and likely will encounter a system already modified by and because of the early boomers. This difference in the retirement systems the two subcohorts will likely face as they approach and enter retirement is illustrated in figure 4-2, which shows for the Old Age and Survivors Insurance (OASI) system the estimated ‘‘actuarial balance’’ (annual income minus outgo of OASI) and the estimated trust fund ratio (the ratio of the fund to estimated expenses) at the age each birth-year cohort reaches age 62 (the early retirement age) and at their full retirement age (age 66 or 67, depending on year of birth). A fifth trend line shows the trust fund ratio at the age of full retirement plus life expectancy.

FIGURE 4-2. Social Security Ratios at Key Retirement Years: Baby Boomers Identified by Birth Year

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When the first boomers reached age 62 in 2008, the OASI system was in surplus by all annual measures.1 The Social Security actuarial balance was positive, and the trust fund stood at well over four times annual outgo. Based on the ‘‘Intermediate Assumptions,’’ the system is projected to remain in surplus during the years this first subcohort becomes eligible for retiredworker benefits, although the actuarial ratios will steadily decline through much of their retired lives. Only in the later years of their lives (see the graph of trust fund ratio at life expectancy in figure 4-2) is the trust fund projected to be fully depleted. The situation facing OASI during the retired lives of the later boomers will be markedly different. While it is no surprise to see the steady negative slope in all these lines, the graph visually shows the sharply different policy environment that is likely to prevail. As they first become eligible for Social Security retired-worker benefits, this trailing-end subcohort is projected (again based on the ‘‘Intermediate Assumptions’’) to confront a Social Security system that will, without changes in costs or benefits, continue its steady deterioration in financial health, including negative trust fund balances through most of their retired lives. It is important to note that projections are of a scenario based on specific demographic and economic assumptions, including, in the case of Social Security, revenue and cost balances about benefits paid and FICA (Federal Insurance Contributions Act) tax levels. With benefit payments projected (without program changes) to persistently exceed system income over most of the lives of the earlier cohort, the later boomers will almost certainly face a less generous system. As the ‘‘pay-as-you-go’’ educational systems had to grapple with the questions of how to pay for the education of the baby boomers and what education would be necessary for economic growth and family well-being, so must this pay-as-you-go retirement income system grapple with the questions of what income is necessary for social and individual well-being in a world that will change over their retired lifetimes. The answers will likely affect the incomes and retirement behavior of the early and later boomers differently. EARLY AND LATER BOOMERS: GROWING ECONOMIC AND DEMOGRAPHIC DIVERSITY Arguably the most comprehensive projections of the economic well-being in retirement of the baby-boom generation come from the Social Security Administration’s (SSA) MINT model, a simulation model developed by SSA’s Office of Research, Evaluation, and Statistics in cooperation with the Brookings Institution, the RAND Corporation, and the Urban Institute (Toder et al. 1999). This model starts with a nationally representative sample from the 1990–1993 Survey of Income and Program Participation (SIPP), with individuals’ records matched to SSA earnings and benefit data. It projects for

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each person over their remaining lifetime their marital status and changes; work patterns and earnings; asset holdings and growth; pension coverage, participation, and benefits; and Social Security receipt age and benefits. Butrica, Iams, and Smith (2007) compare MINT projections for the two baby-boom subcohorts (as well as with projections for their parents’ generation), and they project that on some key measures the two boomer subcohorts appear differently prepared for retirement, but that both groups are likely on average to have higher retirement incomes and experience lower poverty rates than did their parents.2 This projected greater income security compared to previous generations reflects in part the growth in real wage earnings, the greater labor force participation and higher earnings of women in this generation compared to their mothers—either as sole workers or in dual-earning households—and the higher pension coverage and more generous benefit provisions for this compared to the previous generation. Likewise baby boomers are expected to have accumulated greater wealth compared to the previous generation (Congressional Budget Office 2004). Differences between the two baby-boom subcohorts reflect the accumulating effects of retirement-related changes that took place over their working-age years—the slowing (though still positive) earnings growth, increasing rates of divorce, and declining importance of defined benefit pension plans. Health insurance coverage has also declined, leaving a slightly higher fraction of the baby boomers uninsured (Levy 2007) and vulnerable to higher out-of-pocket medical care costs. Likewise, baby boomers are estimated to face higher long-term care costs—with consequences for retirement savings adequacy—as fiscally constrained states and smaller families grapple with the tax consequences of a growing dependent and longer-lived population (Johnson et al. 2007). These trends become more evident among the trailing baby-boom subcohort. While projected real retirement incomes are expected to be higher on average for more recent cohorts (among baby boomers and their parents), other economic well-being standards project a more complex picture. One frequently used standard of well-being is the extent to which retirees are able to maintain their preretirement consumption in retirement. This is a relative standard of well-being (in contrast to an absolute income measure) that is operationalized by comparing expected retirement income to preretirement income, with some percentage of preretirement income adopted as a measure of ‘‘sufficient’’ income or retirement savings.3 The use of this relative (replacement rate) measure, rather than an absolute income measure, to judge the future well-being of retirees reflects an assumption that individuals wish to maintain preretirement consumption levels in retirement and that society should judge the adequacy of its retirement system by the degree to which retirees must (presumably unwillingly) alter their consumption and lifestyle when work ceases.4 Butrica, Iams, and Smith (2007) find that replacement rates have declined for the baby-boom cohort as a whole compared to earlier cohorts, though projected rates are identical (at 81 percent) for both the leading- and

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trailing-edge baby-boom subcohorts. Groups with the highest replacement rates reflect the progressive benefit formula of Social Security, which replaces a higher percentage of covered earnings of low earners, as well as access by low-income groups to means-tested benefits. Groups with projected higher replacement rates are disproportionately never-married women, those with fewer years of wage earnings, and those with the lower total lifetime earnings. Because the least advantaged economically are found to have higher replacement rates, Haveman and colleagues (2007a) argue that this standard has ambiguous social content. Using a replacement standard, policy makers would judge as worse off relative to their lower-income peers those with high preretirement income but low replacement rates, even if they are more able to cover expected postretirement consumption. Against this replacement standard of well-being, the baby-boom cohorts are worse off compared to their parents’ generation despite higher real incomes. In another study, Haveman and his colleagues (2007b) adopt a different standard, comparing the steady potential consumption stream obtainable from retirement resources with the poverty (or twice-poverty) threshold, asking whether expected income at retirement would be sufficient to maintain consumption above this social adequacy standard throughout every remaining year of expected life, including the years when only one spouse in a married-couple household survives. Individuals meeting the poverty standard of well-being are quite different from those meeting the replacement standard; those with less consistent labor market attachment and those with lower education levels are most likely to have insufficient retirement resources to maintain them above this poverty-level standard (or twice that standard) during all remaining years of retirement. In contrast to Butrica, Iams, and Smith (2007), Haveman and colleagues (2007b) estimate higher overall poverty rates for more recent retiree cohorts, although both estimate higher poverty rates for individuals with weak labor market attachments in younger than in older cohorts.5 This is consistent with earlier speculation by Easterlin, Schaeffer, and Macunovich: On average, the boomers are currently doing considerably better than their parents did at the same point in the life cycle, and the prospect is that this will continue to be true into retirement. The possible exception is the poorest segment of the boomers, especially the trailing edge cohorts. Although they are currently somewhat better off than their counterparts in the parental generation, they may end up worse off. (1993, 518)

THE MOST VULNERABLE AMONG THE BABY BOOMERS The probable higher poverty rates for some groups in more recent (including baby-boom) cohorts nearing retirement reflect labor market and demographic trends during the 1970s through the 1990s that increased economic risks for some and opportunities for others. While increased education among

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successive cohorts of boomers raised real earnings potential among both women and men, these gains were offset for some families by higher rates of divorce, single parenthood, and immigration and by declining employment in manufacturing jobs that generally had provided retirement and health benefits. The baby boomers in many ways have led the way as the U.S. population became more diverse in terms of earnings capacity and economic security. From 1967 through the 1990s, income inequality grew among the nonelderly even as inequality fell among the then-elderly cohorts, the latter trend fueled in large part by improvements in Social Security benefits that favored lower income retirees (Bradbury 1996; Rubin, White-Means, and Daniel 2000).6 Factors that have been identified as contributors to the growing inequality among workers include the widening gap in earnings by educational status, as the wages of high-school-graduates-only lagged; differences in family incomes of one- and two-earner families; and the increase in what is termed ‘‘assortative mating’’ by education and earning status.7 This increase in working-age income inequality is expected to continue into retirement. Butrica, Iams, and Smith (2007) predict greater income inequality overall among baby-boomer cohorts than their parents’ generation and also greater income inequality by education and ethnic group, especially for the trailing-edge boomers, who are characterized by increased demographic and economic diversity. It is this growing diversity in demographic composition and the behavioral responses to changing economic circumstances that make projections of baby boomers well-being an uncertain task. One of the important demographic changes in which the baby boomers led is in ethnic composition. Lynch (2007, 851) contrasts the ‘‘largely white, aging baby boomers and a younger, far more ethnically diverse Global America.’’ While it is true this generation is less ethnically diverse than will be later generations of retirees, the baby-boomer cohort consists of many more than just those born to post–World War II U.S. parents. It reflects the leading edge of ethnic diversity as well. Immigrants have increased the size of the early boomers’ birth cohort by 14 percent and the later boomers’ by 16.5 percent,8 with more recent immigrants being increasingly Hispanic. This is thus already an ethnically diverse group, with immigrants adding to the productive capacity of a nation (and their cohort), though on average recording lower earnings and family income and higher poverty rates than their native-born peers (Butrica, Iams, and Smith 2007). The economic security and vulnerability of members in this (or any) generation depend not just on the characteristics individuals bring to the labor market—their education and skills relative to the demand for workers—but also on the institutions with which they interact and how those institutions respond to this larger and more diverse cohort. Retirement institutions and savings vehicles have changed in important ways over the work-lives of this cohort. Amendments in 1978 to the Internal Revenue Code, effective in January 1980 when the oldest baby boomers were 34 and the youngest 20 years

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old, allowed for 401(k) accounts. While coverage by defined benefit pension plans has fallen for successively young boomers, increasing coverage by defined contribution pension plans and savings through 401(k) individual tax-deferred accounts and IRAs has most likely allowed for greater wealth accumulation by baby boomers, although this is most true for those with college educations (Bernheim and Scholz 1993). Economic security also depends on the reaction of the baby boomers to changes in their economic circumstances. Easterlin et al. (1990) argued that the baby boomers would be better off than their parents in part because of their smaller families and more dual-earning households, and that the positive effect of these changes on family incomes for this cohort outweighs the adverse economic conditions many faced.9 More recently, Plotnick (2008) documented the favorable economic position of childless married and single women and men. The implication of these findings is that behavioral responses by this cohort to socioeconomic conditions they confront as they approach retirement may cause divergence of actual economic status from projections due to behavioral adjustments. Notably, the early retirement trend has slowed and perhaps reversed; Friedberg (2007) sees this is a likely response to increasing uncertainty about retirement security. Uncertainty about the future stability of retirement wealth holdings in the face of more recent mortgage crises and bank failures may also cause this cohort to further delay retirement, to save more for retirement, or to adjust consumption in retirement. Whether this makes individuals ‘‘worse off’’ in retirement than their parents were will be a matter of individual and social debate. CONCLUSION In a report for the Commonwealth Fund, a group of policy experts argued that (and titled the report) ‘‘demography is not destiny’’:10 Society’s future is not determined solely by demographic changes. Focusing on the anticipated growth in population by age group is just too simplistic an approach. Rather, the future is shaped by the choices made—or not madeindividually and collectively, bounded by the limits in resources and, in particular, knowledge. Knowledge is at the heart of gains in productivity, economic growth, and the advances in medical care, agriculture, communication, transportation, and the environment. Population change must be considered in the context of other changes throughout the economy and society. Private markets and public policies are not only effective tools for encouraging individual behavior, but also for responding to the collective needs of consumers, workers, and employers. (Friedland and Summer 2005)

And so the economic well-being of the baby-boom cohort (and its subgroups) will depend on how it has been shaped by economic and social

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changes over time—both before and during retirement—as well as how institutions respond to the cohort, not just to its sheer size but also to other demographic and social changes. The baby-boom cohort, especially its trailing edge, has been at the leading edge of changes that are not just limited in their effects to the social and economic well-being of this particular generation and to the retirement policies facing them as they age. Changes experienced by the baby-boom cohort will be mirrored in the smaller cohorts that follow. With more education, more women working, and more retirement savings options, many in the overall cohort will be better off than the early subcohort; the same will be true for the smaller subsequent cohorts. Higher rates of divorce, ethnic diversity, and immigration have contributed to growing inequality and probably higher rates of poverty in the future. The larger cohort approaching retirement, followed by a relatively small cohort of workers, is likely to increase employment opportunities for older individuals, delay retirement and the first receipt of retirement benefits, and change savings behavior at the end of life. On the other hand, longer expected lives will increase potential years of retirement and disability, health care inflation may continue to raise health care and health insurance costs, and more older adults with fewer family caregivers may increase the demand for publicly financed custodial care. It is easy to use ‘‘simplistic’’ projections to project (usually) dire consequences for public and private retirement income programs from the ‘‘burden’’ of the larger baby-boom cohorts as well as for their children. Continued productive use of the human capital provided by the baby boomers is the challenge posed by the boomers to society and to themselves as well. The use of economic incentives to encourage their savings and wise use of those savings, including for investment in the economic future of their (or their neighbors’) children, is the challenge.

NOTES 1. On February 12, 2008, the first baby boomer received a Social Security retirement benefit. Kathleen Casey-Kirschling was born one minute after midnight on January 1, 1946. See the Social Security Administration’s press release at http:// www.ssa.gov/pressoffice/pr/babyboomer-firstcheck-pr.htm. 2. This article and others on baby boom retirement behavior and well-being are available at the website of the Pension Research Council, which holds annual conferences with papers appearing in edited volumes. See http://www.pensionresearchcouncil. org/publications/papers.php?year=2007. 3. A standard of 70 percent of preretirement income has been used in the literature. The argument for less-than-100-percent replacement is usually that, when work ceases, there are declines in required work expenses, retirement income is tax favored, and retirees have more time to spend on activities that would have otherwise required

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out-of-pocket expenditures (e.g., home maintenance, lower monetary but high timecost travel). Others argue that their reduced mobility, loss of employer-provided benefits and services, and deteriorating health may increase income requirements. The 70 percent standard is used in Haveman et al. 2007a; Bernheim et al. 2001 provides evidence supporting the use of this percentage across income groups. 4. The degree to which consumption declines voluntarily is a complicated story. Lundberg, Startza, and Stillman (2002) find that consumption declines for couples but not for single individuals upon retirement. They hypothesize that wives bargain to preserve resources for their longer expected lifetimes, with their bargaining power increasing when husbands retire. In this scenario, consumption changes are due to couples’ decisions about how to allocate resources over their remaining lifetimes. This suggests that changes in work and earnings patterns of husbands and wives and in the probability of marriage (and being married at retirement) will alter observed consumption patterns at retirement for the younger baby boomers, with those patterns being more consistent with longer life expectations and more favorable for the well-being of widowed men and women. 5. Higher predicted poverty rates for some vulnerable groups as overall poverty rates fall imply lower poverty rates predicted for others. This is where the two groups of researchers vary in their conclusions, with Haveman and colleagues (2007b) predicting less improvement in the economic circumstances of unmarried women. 6. Even if income increases for all groups, income inequality can grow if the growth is greater among higher-income groups. Inequality also increases if incomes at the lower end of the distribution grow more slowly than for most income groups. Both changes have contributed to the increase in income inequality in the United States. The share of resources going to the top 5 percent of the population in the income distribution has increased over time; the proportion who were poor grew in the 1980s, fell in the 1990s (Plotnick, Smolensky, and Evenhouse, 1998), and has risen slightly since 2000. 7. Assortative mating is the tendency to marry persons with like characteristics. This has increased over time, with more-educated (and therefore higher-earning) individuals increasingly likely to marry other well-educated individuals. The security once obtained through marriage to a more highly educated individual has diminished over time. See Holden and Fontes forthcoming. 8. Author’s calculations from SIPP data. 9. The argument is that, as growth in earnings slowed, families in which total work hours increased—including due to additional family members entering the workforce—would be better off. If there were fewer children, resources could be diverted to retirement savings. 10. This report is a follow-up to a report issued in 1999 by the National Academy on an Aging Society by the same authors, and largely the same assembled experts, titled ‘‘Demography Is Not Destiny’’ (Friedland and Summer 1999).

REFERENCES Bernheim, B. D., and J. K. Scholz. 1993. Private saving and public policy. Tax Policy and the Economy 7: 73–110. Bernheim, B. D., J. Skinner, and S. Weinberg. 2001. What accounts for the variation in retirement wealth among U.S. households?’’ American Economic Review 91 (4): 832–57.

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Blau, Francine D., Marianne A. Ferber, and Anne E. Winkler. 1998. The economics of women, men and work. 3rd ed. Upper Saddle River, NJ: Prentice Hall. Bradbury, Katharine L. 1996. The growing inequality of family income: Changing families and changing wages New England Economic Review: 55–82. Butrica, Barbara A., Howard M. Iams, and Karen E. Smith. 2007. Understanding baby boomers’ retirement prospects. In Redefining retirement: How will boomers fare? ed. B. Madrian, O. S. Mitchell, and B. J. Soldo. Philadelphia: Wharton Pension Research Council/Oxford University Press. Congressional Budget Office. 1993, September. Baby boomers in retirement: An early perspective. Washington, DC: Congressional Budget Office. Congressional Budget Office. 2004. Retirement prospects of the baby boomers. Http://www.cbo.gov/ftpdoc.cfm?index=5195&type=0&sequence=0. Easterlin, R. A. 1966. On the relation of economic factors to recent and projected fertility changes. Demography 3 (1): 131–51. Easterlin, Richard A., Christine M. Schaeffer, and Diane J. Macunovich. 1993. Will the baby boomers be less well off than their parents? Income, wealth, and family circumstances over the life cycle in the United States. Population and Development Review 19 (3): 497–522. ———. Retirement prospects of the baby boom generation: A different perspective. The Gerontologist 30 (6): 776–83. Finberman, Karen, and Megan Dolbin-MacNab. 2006. The baby boomers and their parents: Cohort influences and intergenerational ties. In The baby boomers grow up: Contemporary perspectives on midlife, ed. S. K. Whitbourne and S. L. Willis. London: Routledge. Friedberg, Leora. 2007. The recent trend towards later retirement. Issues in Brief, Series 9. Boston: Boston College Retirement Research Center. Friedland, Robert B., and Laura Summer. 1999. Demography Is Not Destiny. Washington, DC: National Academy on an Aging Society. ———. 2005. Demography Is Not Destiny, Revisited. New York: Commonwealth Fund. Haveman, Robert, Karen Holden, Andrei Romanov, and Barbara Wolfe. 2007a. Assessing the maintenance of savings sufficiency over the first decade of retirement. International Tax and Public Finance 14:481–502. Haveman, Robert, Karen Holden, Barbara Wolfe, and Andrei Romanov. 2007b. A comparison of two cohorts of retired workers at the time of retirement. In Redefining retirement: How will boomers fare? ed. B. Madrian, O. S. Mitchell, and B. J. Soldo. Philadelphia: Wharton Pension Research Council/Oxford University Press. Holden, Karen, and Angela Fontes. Forthcoming. Economic security in retirement: How changes in employment and marriage have altered retirement-related economic risks for women. In Women in the retirement years: New sources of diversity, ed. Heidi Hartmann and Sunhwa Lee. New York: Russell Sage Foundation. Johnson, Richard W., Desmond Toohey, and Joshua M. Wiener. 2007. Meeting the long-term care needs of the baby boomers: How changing families will affect paid helpers and institutions. The Retirement Project Discussion Paper 07-04. Urban Institute. Accessed at http://www.urban.org/url.cfm?ID=311451. Levy, Helen. 2007. Health insurance coverage of the baby boomers approaching retirement. In Redefining retirement: How will boomers fare? ed. B. Madrian, O. S.

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Mitchell, and B. J. Soldo. Philadelphia: Wharton Pension Research Council/ Oxford University Press, 159–75. Lundberg, Shelly, Richard Startza, and Steven Stillman. 2003. The retirementconsumption puzzle: A marital bargaining approach. Journal of Public Economics 87 (5–6): 1199–1218. Lynch, Frederick. 2007. Aging boomers and demographic change: New social contract or a Blade Runner society? Gerontologist 47 (6): 851–54. Mitchell, Olivia S. 2000. New trends in pension benefit and retirement provisions: A report to the Pension and Welfare Benefits Administration of the U.S. Department of Labor. Available at http://www.dol.gov/ebsa/pdf/Mitchell020300.pdf. Penner, Rudolph G. 1998. A brief history of state and local fiscal policy. New Federalism Series, No. A-27. Washington, DC: Urban Institute. Available at http:// www.urban.org/url.cfm?ID=308018. Plotnick, Robert D. 2008. Childlessness and the economic well-being of elders. Discussion Paper No. 1336-08. Madison, WI: Institute for Research on Poverty. Plotnick, Robert D., Eugene Smolensky, and Eirik Evenhouse. 1998. The twentiethcentury record of inequality and poverty in the United States. Discussion Paper No. 1166-98. Madison, WI: Institute for Research on Poverty. Poulos, Stacy, and Demetra Smith Nightingale. 1997. Employment and training policy implications of the aging baby boom generation. Washington, DC: Urban Institute. Available at http://www.urban.org/url.cfm?ID=407145. Quinn, Joseph. New paths to retirement. 2000. In Forecasting Retirement Needs and Retirement Wealth. ed. B. Hammond, O. Mitchell, and A. Rappaport. Philadelphia: University of Pennsylvania Press, 13–32. Rubin, Rose M., Shelley I. White-Means, and Luojia Mao Daniel. 2000. Income distribution of older Americans. Monthly Labor Review (11): 19–30. Russell, Louise B. 1982. The baby boom generation and the economy. Studies in Social Economics. Washington, DC: Brookings Institution Press. Toder, Eric, Cori E. Uccello, John O’Hare, Melissa Favreault, Caroline Ratcliffe, and Karen E. Smith. 1999. Modeling income in the near term: Projections of retirement income through 2020 for the 1931-60 birth cohorts. Washington, DC: Urban Institute. Available at http://www.urban.org/url.cfm?ID=410315.

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Will the Boomers Revolutionize Work and Retirement? SARA E. RIX

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n October 15, 2007, Kathleen Casey-Kirschling, less than three months shy of turning 62, applied for Social Security retired worker benefits. There was nothing unusual about her doing so—in recent years, nearly two million workers annually have been awarded benefits at age 62 (Social Security Administration 2007). But Casey-Kirschling is a boomer, celebrated as the first of 76 million babies born in the United States from 1946 through 1964, and boomers’ retirement was going to be different from that of their parents and grandparents. Casey-Kirschling may yet help redefine retirement for the millions of boomers marching inexorably toward Social Security eligibility age; however, she hardly sounded as if that were on her mind when she observed, ‘‘I’m going to take [Social Security] now because I can take it now. I’m thrilled to think that after all these years I’m getting paid back the money I put in’’ (Milbank 2007). In fact, Casey-Kirschling sounded much like her parents or other older relatives might have sounded when they reached the early benefit eligibility age. She would go on to receive her first check early in 2008. A great deal seems to be expected of America’s boomers as far as work and retirement are concerned. Boomers, it has been maintained, are going to reinvent and/or revolutionize retirement. Not for them is an early labor force exit to full and permanent retirement. Rather, they will work longer, perhaps much longer, than their parents and combine work and leisure in new and

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more rewarding ways. Assertions such as these are based in part on the observations of boomers themselves, 80 percent of whom have maintained that they plan to work in retirement (AARP 1998, 2004). Many boomers contend that they expect never to retire (AARP 2002b, 2004). TRENDS IN LABOR FORCE PARTICIPATION And millions of boomers might not be able to retire—at least not at the early ages typical for much of the past half-century. Estimates and conclusions about retirement preparation vary, but many boomers have relatively little in savings or projected retirement income beyond Social Security. For these workers, the options appear to be an early retirement with a reduced standard of living or working longer for the current income and the higher retirement benefits that longer work-lives make possible. The Congressional Budget Office (2004b), for example, has estimated that continuing to work and delaying receipt of Social Security benefits until age 70 would result in benefits up to 90 percent higher than they would be if taken at 62. Expecting most workers to remain on the job until age 70 may be unrealistic, yet even one additional year of continued beyond 62 means higher Social Security benefits. Recent Trends In recent decades, however, relatively few workers have opted to wait much beyond the age of early eligibility to collect Social Security (Social Security Administration 2007). But even before the age of eligibility for early benefits was lowered to 62 (in 1956 for women and 1961 for men), labor force participation rates at older ages were undergoing profound changes. Men were leaving the labor force in large numbers at relatively young ages. The labor force participation rate for men aged 55 to 64 fell sharply in the years following World War II, as did the rate for men aged 65 and over. In contrast, the participation rate for women aged 55 to 64 rose markedly over the same period, while the rate for women aged 65 and older remained low and quite stable. Nonetheless, women’s growing attachment to the labor force, although resulting in an increasingly female older workforce, was not enough to offset the withdrawal of men. As a result, the labor force participation rate for the 55-and-over population fell for several decades after World War II (see figure 5-1). By 1993, this age group comprised only 11.6 percent of the total workforce, down from a 1953 postwar high of 18.4 percent. By the mid-1980s or so, things began to change for men. Labor force participation rates stabilized and then began to rise, most notably among men 65 and older. Rates continued to rise among women. Even women 65 and older have become increasingly likely to be working or looking for work. Indeed, growing numbers of older Americans have been bucking the retirement trend in recent years. In fact, some of the largest increases in labor

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FIGURE 5-1. Labor Force Participation Rates for Persons Aged 55+ and 65+, 1948–2007 Source: U.S. Bureau of Labor Statistics, labor force statistics from the Current Population Survey, available at http://data.bls.gov/PDQ/outside.jsp?survey=ln.

force participation rates over the past two decades have been among what has conventionally been thought of as the ‘‘retirement-age population,’’ those aged 65 to 69. Increases in the 65-and-up group have been especially dramatic for women (see table 5-1 and figure 5-2). Despite rising labor force participation at upper ages, receipt of Social Security at the early retirement age has remained the norm. With the passage of the Senior Citizens’ Freedom to Work Act of 2000—which enabled workers above the full retirement age to collect Social Security and continue earning without any loss of benefits—one incentive to delay benefit receipt was eliminated. An uptick in benefits awarded at age 65 in 2000 indicates that some workers had been postponing collecting benefits due to the earnings penalty.1 TABLE 5-1. Labor Force Participation Rates for Persons Aged 60–64, 65–69, and 70–74, 1985/1987–2007 (in percentages) Age and Year 60–64 1985 2007 65–69 1985 2007 70–74 1987 2007

Both Sexes

Men

Women

43.8% 53.3

55.6% 59.2

33.4% 47.9

18.4 29.7

24.4 34.3

13.5 25.7

10.2 17.2

14.7 21.2

6.8 14.0

Source: U.S. Bureau of Labor Statistics, labor force statistics from the Current Population Survey, available at http://data.bls.gov/PDQ/outside.jsp?survey=ln.

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FIGURE 5-2. Percent Increase in Labor Force Participation Rates for Persons Aged 55+ by Age Group and Sex, 1985/1987–2007 Source: U.S. Bureau of Labor Statistics, labor force statistics from the Current Population Survey, available at http://data.bls.gov/PDQ/outside.jsp?survey=ln.

Although receipt of retirement benefits and continued employment are obviously not necessarily mutually exclusive, the benefit reduction for earnings above the taxable maximum—which remains for Social Security beneficiaries under the full eligibility age—has been viewed as a work disincentive (see Bartlett 2001). Private defined benefit pension plans may also discourage work after an often early normal retirement age when further accruals from continued employment fail to offset the loss of benefits not collected while working. Workers affected by such plans do not have to leave the labor force to collect their pensions, but until recently, if they were below a plan’s normal retirement age, they had to switch employers, which is not always easy for an older worker. Or, they could retire and be rehired by their former employer. The Pension Protection Act of 2006 permits employers to pay benefits to workers at age 62 and thus alleviates this problem for workers whose employers agree to do so. The Historical Pattern As discussed below, there are many reasons to assume that the retirement timing of boomers will differ from that of their parents. However, it is worth keeping in mind that ‘‘retirement’’ as it is understood today is a relatively recent phenomenon. Not so long ago, few workers had any way of sustaining a nonworking old age unless they had accumulated sufficient savings or could depend on support from their families. Monthly Social Security payments were not available until 1940. In 1900, about two-thirds of men 65 and older were still in the labor force (U.S. Bureau of the Census 1975, table D 29-41). This figure fell gradually over the ensuing three decades and then took a sharp dive during the Great Depression. Participation increased somewhat as wartime labor shortages caused employers to turn to workers they would otherwise have bypassed in favor of prime-age males.2 By 1950, nearly 46 percent of men aged 65 and over were still in the labor force. As more workers found themselves covered by Social Security

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and private pensions and as Social Security benefits were enhanced, retirement became more economically feasible. Costa (1998) notes that, in addition, leisure activities were becoming more widespread and affordable. Retirement, in other words, no longer consigned someone to the proverbial rocking chair, but instead offered a growing choice of appealing leisure-time activities. Workers started to look forward to retirement, and men’s participation rates began a fairly steady decline, not only for those 65 and over but for those between the ages of 55 and 64 as well. By the mid-1980s, however, a change was becoming evident: the decline in the labor force participation rate for the 55-and-older population leveled off and then started to rise. The increase was once again more pronounced among women (22 percent in 1985 to 32.2 percent in 2007) than among men (41 percent to 43.7 percent).3 Eventually, it seemed safe to conclude that the trend toward ever earlier retirement had reversed itself. Future Projections The Bureau of Labor Statistics projects a continued increase in labor force participation for this age group through 2016. The participation rate for men aged 55 and older is put at 48.3 percent in 2016 (still well below what it was a half-century ago); women are projected to have a participation rate of 38.1 percent (Toossi 2007). Nearly one in four workers will be 55 or older in 2016, up from about one in six in 2007. Whether these potential developments mean a late, as opposed to a somewhat later, retirement remains to be seen. Boomers may expect to work in retirement, but not all of them want to, and some would like that working retirement to begin and end at relatively early ages. Over 40 percent of boomers say they cannot wait to retire (AARP 2004) and may opt to do so at the earliest opportunity. In 1998, the large majority of boomers, then aged 34 to 52, reported that they expected to work in retirement and anticipated stopping work completely at an average age of nearly 64.4 Thus, for many, an early (pre-65) total retirement was still anticipated. The age at which boomers would prefer to stop working completely, however, was considerably younger—59.7 years.5 A preference for retirement at relatively early ages continues to characterize the American workers asked recently by Harris Interactive (2008) about their anticipated actual and preferred retirement ages. Workers in this survey—not all of whom were boomers—said that they expected to retire at an average age of 67.2 years but would like to retire at 59.7, exactly the age boomers preferred ten years earlier.6 WHY WORK? Financial Considerations People work for a variety of reasons, but financial ones tend to top the list, and boomers are no exception to this. Eighty percent of boomers in a 2002

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survey noted that needing the money was a major factor in their decision to be working or looking for work (AARP 2002b). In fact, just over one-third strongly agreed that the only reason they continued work was because they needed the money. Nevertheless, work means more than money to boomers, nearly three-fourths of whom also reported that enjoying their work was a major reason they were working; in addition, majorities said that work makes them feel useful and that being productive is a way they can help others (AARP 2002b). These factors are likely to continue to be important as boomers make decisions about whether and when to retire. Although boomers who expect to work in retirement plan to do so for interest and enjoyment’s sake as well as for the money, financial reasons seem to have become more salient with time (see AARP 1998, 2002, 2004). Social Security’s Role Boomers should be concerned about whether their financial resources will last should they live well into their 80s or 90s. In all likelihood, Social Security will remain the dominant source of retirement income for boomers, as it has been for current retirees. Although replacement rates vary by work history and earnings, Munnell and Soto (2005) calculate a median replacement rate of only 44 percent for all households. Workers generally do not have to worry about replacing 100 percent of their preretirement earnings in order to maintain living standards after retiring, since some expenses fall; however, 44 percent will probably not be sufficient for most workers. Under the concept of the ‘‘three-legged stool’’ of retirement-income security, pensions and private savings are supposed to make up the difference between what Social Security provides and a replacement rate of perhaps 70–80 percent of preretirement earnings. Many workers have a long way to go to achieve that goal. Private Pension Coverage Pension coverage, for example, has stagnated since the late 1970s, and as of 2004, fewer than half (46 percent) of private-sector workers aged 25 to 64 participated in a pension plan at work (Center for Retirement Research 2008). A higher proportion of workers may eventually reach retirement age with access to pension benefits as a result of coverage on previous or subsequent jobs. However, without an expansion of coverage to workers (e.g., in small firms) who have typically lacked it, it is questionable just how great an increase will occur. Moreover, pension offerings themselves have changed dramatically. According to Munnell and Perun (2006), 62 percent of workers with pension coverage in 1983 had a defined benefit plan only and 12 percent had a defined contribution plan only. Twenty-one years later, only 20 percent of workers with coverage were covered by a defined benefit plan only; 63 percent were now covered by a defined contribution plan only.

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Defined contribution plans shift the risk of retirement income preparation from employers to their employees, whose decisions about how much to save, where to invest, and how to disperse accumulations—as well as the returns to investments—determine what they will collect in the way of retirement benefits. This is in contrast to defined benefit pensions for which employers bear the risk and which generally pay out benefits in the form of guaranteed lifetime annuities. Given that the majority of workers with pension coverage are now in defined contribution plans, future retirees will have fewer assurances about pension plan payout. Furthermore, the majority of boomers lack much in the way of retirement savings beyond these pension plans. The Government Accountability Office (2006) finds that most of the money held by boomers in stocks, bonds, mutual funds, individual retirement accounts (IRAs), and other such retirement savings plans in 2004 was held by the wealthiest 10 percent of the population, concluding that ‘‘a large majority of boomers have few assets to sell’’ (2). For most, housing is the largest source of wealth. Boomers may therefore increasingly face the tradeoff of working longer or making do with less. Some may opt for the latter, as many of today’s retirees have apparently done. Fewer than half of the 65-and-older population—most of them retired—have private pension income. Despite the fact that a majority receive some income from assets, more than four in ten report no income from interest, dividends, rents, or royalties, and median amounts for those who do have assets tend to be low (Social Security Administration 2006).7 Some retirees may have outlived their savings or pensions, but others may have concluded that they could afford to retire without much in the way of income to supplement Social Security, perhaps by voluntarily scaling back their expenditures. Baby boomers could always come to a similar conclusion, although from what they are saying in various surveys, working longer to boost replacement rates seems the way a larger number of them will go, if they can. Market Uncertainty Market uncertainty is another factor that may discourage workers from leaving the labor force quite as early as they might like to. It is easier for older workers to keep a job than to find a new one. This may be due in part to the Age Discrimination in Employment Act (ADEA), which Neumark (2001) suggests may have strengthened the long-term relationship between workers and firms and thus increased the employment of older workers, while at the same time having an adverse impact on hiring. Duration of unemployment tends to be substantially longer for older workers, and, during economic downturns, it can be expected to rise for workers of all ages. When the economy turned downward in 2001, older workers who had experienced stock losses could try to make up for those losses by working longer. About one-fifth of those aged 50 to 70 said they had pushed back the date of retirement; substantially fewer retirees, on the other hand, tried

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to find work (AARP 2002a). Uncertainties about the current market and economy may cause boomers (and other older workers) to think about adding an employment ‘‘leg’’ to their retirement-income stool. Health Care Coverage Other developments are likely to influence boomers’ retirement decisions. Health care coverage in the United States is largely employer based. With cutbacks in retiree health benefits (Henry J. Kaiser Family Foundation and Hewitt Associates 2006), fewer workers can count on those benefits to serve as a bridge to Medicare eligibility. Workers who retire early, lose their jobs, move to employers who do not offer health insurance, or become selfemployed and exhaust COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986) coverage or lack a family member whose own health plan will cover them have few reasonably priced options for insurance but to remain with an employer who provides health insurance. Considerations of Longevity and Health Status Rising life expectancy may also give boomers pause when it comes to the retirement date. One might hypothesize that workers who expect to live long after retirement would delay claiming retirement benefits and perhaps even work longer before claiming. In fact, Hurd, Smith, and Zissimopoulos (2003) found that subjective probabilities of survival did have some impact on the claiming of Social Security benefits, with persons whose probabilities were very low claiming earlier than those with higher probabilities. But because most workers claim benefits as soon as they are eligible, the effects were not large. Although it is hard to envisage boomers dwelling on their own life expectancy, the topic of possibly outliving one’s resources is becoming somewhat more difficult to avoid in view of the burgeoning number of newspaper and magazine articles on retirement preparedness. A male at age 60 can expect to live another 20.8 years, on average, up by 4.8 years since 1969–1971; a female at that age has another 24 years to live on average, an increase of 3.4 years over the same period (Arias 2007). These are, of course, just averages, and many people will die at younger ages, but others will live well beyond them. Concern about resources lasting long enough, perhaps coupled with questions about how to spend decades of retirement, might prompt some workers to reassess the wisdom of early retirement. Health status also influences the retirement decision, whether it is voluntary or involuntary. Workers in poor health are more likely than healthy workers to retire, especially at younger ages; retirees are also substantially more likely than their nonretired age peers to report fair or poor health and work-limiting conditions (Uccello 1998). These observations are hardly surprising. The key question is whether boomers are healthier than their parents or grandparents and so able to work longer.

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Mortality rates at upper ages have fallen (National Center for Health Statistics 2006), and disability rates at upper ages have been declining (Manton and Gu 2001). It is commonly assumed that the overall health status of older Americans has changed for the better along with mortality and disability improvements. The percentage of persons over age 55 claiming to be in only fair or poor health fell by two to three percentage points between 1991 and 2004 (National Center for Health Statistics 2006). Crimmins (2001), however, observes that while people are living longer, they are not necessarily healthier and that the answer to the question of whether older persons are healthier today depends on the measure. Certain chronic conditions have been on the rise, while other indicators of health status have improved. In an examination of respondents aged 51 to 56 from three different cohorts (1936–1941, 1942–1947, and 1948–1953) of the longitudinal Health and Retirement Study, Weir (2007) detected little evidence that the early boomers at this age were in better health on objective measures than those born twelve years earlier. Subjectively, however, boomers felt worse off. This analyses suggest a half-empty glass. Munnell and Libby (2007), on the other hand, seem to see a glass that is half full, concluding that the health of older workers today is at least as good as it was forty years ago. It would seem, therefore, that if a high percentage of Americans could work at older ages in the past, just as many and perhaps more should be able to do today. In a similar vein, Weir points out that most retirees in their 60s and 70s are healthy enough to work and that health conditions are being managed so ‘‘boomers could defer retirement several years’’ (2007, 109). Factors Facilitating Longer Work Lives The factors highlighted in the preceding paragraphs may discourage retirement and serve to keep workers in the labor force longer than they might prefer or would have done otherwise. Other factors, however, will likely encourage them to stay. Rising Educational Attainment One factor is rising educational attainment. Only 27 percent of persons 65 or older had not completed high school in 2004, compared to almost 45 percent in 1990 (U.S. Bureau of the Census 2006, table 38). Likewise, a higher proportion had a bachelor’s or advanced degree. Educational improvements provide greater access to the types of jobs conductive to longer work-lives and make workers more attractive to employers, thus opening up employment opportunities not available to less well-educated workers. Haider and Loughran (2001) found that ‘‘elderly’’ workers, that is, those aged 65 or older, were better educated (as well as healthier and more affluent) than their nonworking age peers.

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Less Physically Demanding Jobs Also facilitating longer work-lives has been the decline in physically demanding jobs. Between 1950 and 1996, the proportion of workers in such jobs (i.e., those requiring frequent lifting or carrying objects weighing more than 25 pounds) fell from 20 percent to 7.5 percent (Steuerle, Spiro, and Johnson 1999). As of 2006, relatively few workers (7.3 percent) were in jobs imposing high physical demands (e.g., requiring exerting maximum muscle force to move objects) or the need to bend or twist, although about 46 percent were in jobs with any such demands (Johnson, Mermin, and Resseger 2007) To the extent that physically demanding work pushes people out of the workforce— and it does (Johnson, Mermin, and Resseger 2007; Uccello 1998)—these changes in the nature of work indicate that fewer workers are and will be leaving employment because their jobs are physically too demanding. Workers may still face difficulties on the job as they age, although those difficulties are not necessarily age related. Johnson, Mermin, and Resseger (2007) have calculated, for example, that about one-fourth of all workers are in occupations with difficult working conditions, such as exposure to contaminants or high noise levels. More than 40 percent of jobs involve some stress, although fewer than 10 percent of workers are found in highstress jobs. Johnson and colleagues note sharper declines in physically demanding jobs over time for workers aged 50 and older than for younger workers; however, the older group has experienced steeper increases in stressful, cognitively demanding work. Such working conditions might not be what workers want, but they are also not necessarily insurmountable barriers to later life employment, especially if coupled with the more flexible work options, including phased retirement, that older workers say they would like (AARP 1998, 2004; Watson Wyatt Worldwide 2004). There would seem to be few significant physical reasons why most boomers could not work longer, although some will continue to retire due to health reasons. For instance, the Congressional Budget Office (2004a) reported in 2004—when the oldest boomer was only 58—that four million boomers had already left the labor force. The most common reason was disability, but even so, this was a very small proportion of the older population. Although the number of disabled boomers will rise with the aging of the population, most boomers are not likely to suffer work incapacitation at least through their 60s. Appeal of Older Workers A recent report of the European Agency for Safety and Health at Work (2007) highlights a variety of positive attributes of older employees that should make them appealing to employers. These include an ability to deal with complex organizational models, greater decision-making autonomy, highly developed quality perception, greater ability to estimate their own

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abilities and limitations, and more reliable judgment. The report said that older workers bring experience to the job and may ‘‘attain goals with less effort than younger employees’’ (69). Age is generally accompanied by declines in speed in physical and mental processes as well as in hearing and sight, although not necessarily to a degree that impedes functioning in most of the jobs characteristic of today’s economy, especially if workforce modifications are introduced. In addition, many skills and attributes remain constant over the work-life. EMPLOYER OPTIONS One of the key factors that will influence older workers’ employment options and decisions is employer demand. Even if the ADEA has helped workers remain on the job longer, if employers want to get rid of workers, they can usually find ways to do so, through, for example, restructuring or reorganization. If employers do not need older workers or if they fail to value them (and have sufficient alternative sources of labor), they are not likely to make the accommodations (flexible work arrangements, phased retirement options, job modification or redesign) that might encourage them to stay on and perhaps make their retention more productive. Nor will they be hiring many older workers. Addressing Labor Shortages? Employers facing skills or labor shortages, in contrast, will do what they have to do to acquire or retain the workers they need. This is already evident in the health care industry, where hospitals—desperate for nurses—have been flexible and creative in identifying ways to retain or hire members of this profession. If shortages are experienced elsewhere, comparable responses on the part of employers can be expected, as the pool of potential employees will have fewer young workers. To date, however, there is little evidence that employers in general are preparing for an aging workforce and boomer retirements (Buck Consultants 2007; General Accounting Office 2001). Although there is considerable concern about potential labor and skills shortages (see Ellwood 2003)—and although shortages are apparent in some industries—consensus about the degree to which the country will face shortages is lacking. Some naysayers argue that growing numbers of older workers will remain in the workforce, which will help alleviate possible shortages (Cappelli 2003). Others point to the huge supply of labor available from elsewhere in the world, and some contend that even if there are shortages, they will not be the result of demographics (Freeman 2006a, 2006b). Outsourcing might also eliminate vastly more jobs than currently anticipated (Blinder 2005). If substantial labor shortages do materialize, the employment prospects of older workers should improve, just as they did during World War II. In addition to increasing employer interest in older workers, shortages would also presumably result in higher wages, better benefits, and

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employment policies that would likely entice more boomers to remain in the workforce longer. Making Jobs Attractive In addition to job vacancies, the attractiveness of available jobs will have an impact on whether boomers remain in the labor force and, if they do, for how long. Haider and Loughran’s elderly workers may have been better educated and more affluent than their nonworking peers, but they also tended to be working for relatively low wages (Haider and Loughran 2001). This observation led to speculation that these workers may have made a tradeoff between wages and flexible work arrangements, perhaps opting for flexible arrangements in jobs that had lower wages rather than better-paying jobs with more traditional work arrangements. ‘‘Flex Jobs’’ Flexible work arrangements appear to be available more often on a case-bycase basis than as a workforce norm. About 30 percent of U.S. workers have arrangements that allow them to vary their work hours, a figure that more than doubled between 1985 and 1997 but that has remained stable since then (McMenamin 2007). Surprisingly, differences by sex are relatively minor. The same is generally true for age until the oldest ages. Of some interest is the fact that men aged 65 and older are substantially more likely than women of those ages to be able to vary their work hours (42 percent vs. 33 percent; see figure 5-3). Industry demand, according to McMenamin (2007) is the primary determinant of the availability of these schedules, and of shift work as well. Phased Retirement Phased retirement is another flexible work arrangement believed to be of particular appeal to older workers. Cahill, Gaindrea, and Quinn (2008) note that the majority of older workers (about two-thirds of those transitioning from a full-time career job) retire in stages rather than abruptly. Most workers do not, however, have access to formal phased retirement programs that enable them to scale back their work hours in jobs they know and presumably do well.8 Most of the companies studied by Hutchens (2003) allow workers to reduce their work hours, but on an ad hoc basis rather than as company policy. A variety of barriers such as Employee Retirement Income Security Act (ERISA) regulations and the ADEA are believed to discourage employers from formalizing phased retirement policies; however, it may also be that ad hoc arrangements suit employers by giving them the flexibility they need to offer phased retirement to some workers and not others. Despite professed boomer interest in scaling back work hours before fulltime retirement (AARP 2004), full-time work has, somewhat surprisingly,

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FIGURE 5-3. Percent of Wage and Salary Workers with Flexible Work Schedules by Age and Sex, May 2004 Source: Terence M. McMenamin, ‘‘A Time to Work: Recent Trends in Shift Work and Flexible Schedules,’’ Monthly Labor Review 130 (12), table 3.

been on the increase among older workers. Gendell (2008) notes that, at 62.5 years, the average retirement age has been ‘‘essentially flat’’ for both sexes since the early 1990s.9 However, the percentage of full-time workers has increased dramatically even at quite advanced ages, and among both men and women (see figure 5-4).

FIGURE 5-4. Percent of Older Workers Employed Year-Round, Full-Time* by Sex and Age, 1994 and 2005 *Full-time is a minimum of 50 weeks per year. Source: Murray Gendell, ‘‘Older Workers: Increasing Their Labor Force Participation and Hours of Work,’’ Monthly Labor Review 131 (1), table 4.

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AND ARE BOOMERS WORKING MORE? The oldest of the boomers began turning 62 only in 2008, so it is too early to know just what their later-life employment experiences will look like. Some insight into their labor force experiences can be obtained by examining single-year participation rates for boomers as they age. Table 5-2 reveals how participation changed as the oldest boomers aged from 55 in 2001 to 61 in 2007, the latest year for which data were available. As one moves along the diagonal in the upper and lower panels of the table, one observes a steady decline in rates (aside from a slight increase for women in 2003); the decline is about the same for both men and women (19 percent and 18 percent, respectively). At age 61, male and female boomers are substantially less likely to be in the labor force than they were just six years earlier. At age 55, for example, 82 percent of boomer men were in the workforce; by age 61, that was the case for only 66.4 percent. These do not appear to be the rates of persons about to revolutionize retirement via work. Women might, however, if their labor force attachment at older ages continues to grow. Another way of assessing what of consequence may be happening is by examining how participation rates may be changing at each age in table 5-2. Rates for boomer men at some ages have risen, although not by much. Participation rates for boomer women aged 55 and older, however, have clearly

TABLE 5-2. Labor Force Participation Rates for Men and Women Aged 55–61, 2001–2007 (in percentages) Sex and Age Men 55 56 57 58 59 60 61 Women 55 56 57 58 59 60 61

2007

2006

2005

2004

2003

2002

2001

81.7 79.7 77.7 75.4 73.1 70.4 66.4

81.8 78.8 75.8 76.5 75.0 70.2 64.2

80.6 79.6 77.6 75.8 73.6 67.7 63.5

81.2 79.8 77.6 74.6 72.8 66.6 63.3

81.7 79.0 76.9 75.6 72.9 69.0 64.5

82.3 79.3 77.2 75.8 73.8 68.2 66.3

82.0 78.3 78.3 74.7 72.2 69.5 65.8

70.3 69.6 66.4 64.7 61.8 56.7 54.6

70.9 69.2 66.6 64.2 62.4 56.4 52.6

69.8 66.8 66.7 64.3 59.1 55.7 51.7

69.2 68.0 64.1 63.1 58.6 55.4 52.5

69.8 66.8 65.5 62.2 61.1 56.5 50.9

69.9 64.8 64.2 61.5 56.8 53.4 52.2

66.5 62.2 63.6 59.5 56.1 52.2 48.6

Source: U.S. Bureau of Labor Statistics, unpublished data.

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trended upward. Whether this will continue remains to be seen. Women successful in their careers may find work more rewarding later in life, especially if family caregiving responsibilities have diminished. Women with discontinuous work histories and/or employment in low-wage, low-benefit, female-dominated occupations may need to prolong their work-lives. Or, it may be that, after decades in the labor force, growing numbers of boomer women will be financially and emotionally prepared for retirement and eager to leave the labor force at relatively young ages. In fact, all of these things are likely to characterize a population as diverse as that of the baby boom. There are many reasons to anticipate that boomers, both male and female, will push back the date of retirement. They are likely to need to work longer; they say they want to work; and perhaps much of their image of themselves as ever-youthful boomers is tied to continued employment. Kathleen Casey-Kirschling, Boomer No. 1, may well still be working even though she is collecting Social Security. It would certainly enhance boomers’ retirementincome security if they did work longer and postponed Social Security receipt in the meantime. However, if boomers do remain longer in the labor force, it will not be as revolutionary a development as some pundits might lead us to believe. Boomers will, in fact, be following in the footsteps of even older workers, whose sharply rising participation rates (see table 5-1) would appear to be one of the more exciting and intriguing labor force developments of recent years. Boomers may yet end up doing something unusual in and with retirement, or it may be that they will just do what some even older persons are already doing, but in larger numbers. Workers older than boomers have already begun making their mark on participation rates at upper ages. More research may shed light on whether they—rather than the boomers—were really the harbingers of things to come. NOTES 1. In 1999, 14.8 percent of men who were newly entitled Social Security beneficiaries were age 65; that figure rose to 20.3 percent in 2000 (Social Security Administration 2007, table 6.B5). 2. Decennial census figures put the labor force participation rate for men aged 65 and over at 63.1 percent in June 1900 and 41.8 percent in April 1940. The 47.1 percent participation rate for 1942 and the 46.8 percent for 1948 are annual estimates of average monthly figures and are not directly comparable to the decennial census figures. (See U.S. Bureau of the Census 1975.) 3. U.S. Bureau of Labor Statistics, unpublished data. 4. AARP unpublished data from the 1998 ‘‘Boomers Look toward Retirement’’ survey (AARP 1998). 5. Ibid. 6. This was a multicountry survey of adults ages 16–64 (18–64 in Italy) conducted online by Harris Interactive in partnership with France 24 and the

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International Herald Tribune. The highest average expected retirement age was found for Americans. 7. Surprisingly, age does not seem to have much of an impact on receipt of retirement benefits other than Social Security, at least up until age 85. The percentage receiving such benefits was very similar for units aged 65–69, 70–74, 75–79, and 80–84 (Social Security Administration 2006, table 1.1). 8. Although there are undoubtedly exceptions, one assumes that poor performers would be weeded out before reaching retirement age. 9. If the average retirement age is defined as the age at which half of workers are out of the labor force, then the average retirement age for men as of 2007 was between 63 and 64 and for women between 61 and 62. These figures have been on the increase slightly in recent years (unpublished Bureau of Labor Statistics).

REFERENCES AARP. 1998. Boomers look toward retirement. Washington, DC: AARP. ———. 2002a. Impact of stock market decline on 50–70 year old investors. Washington, DC: AARP. ———. 2002b. Staying ahead of the curve: The AARP Work and Career Study. Washington, DC: AARP. ———. 2004. Baby boomers envision retirement II. Washington, DC: AARP. Arias, Elizabeth. 2007. United States life tables, 2004. National Vital Statistics Reports 56 (9). Hyattsville, MD: National Center for Health Statistics. Bartlett, Bruce. 2001. Why the Social Security earnings penalty should be repealed. Policy Backgrounder No. 152. National Center for Policy Analysis. Available at http://www.ncpa.org/bg/bg152/bg152.html. Blinder, A. S. 2005. Fear of offshoring. Working Paper No. 119. Princeton, NJ: Center for Economic Policy Studies. Available at http://www.princeton.edu/ceps/ workingpapers/119blinder.pdf. Buck Consultants. 2007. The real talent debate: Will aging boomers deplete the workforce? San Francisco: Buck Consultants. Available at http://www.buckconsulants. com/buckconsultants/Portals/0/Documents/PUBLICATIONS/Press_Releases/2007/pr_ 06_11_07.pdf. Cappelli, Peter. 2003. Will there really be a labor shortage? Organizational Dynamics 32 (3): 221–33. Center for Retirement Research, Boston College. 2008. Pension sponsorship and participation nationwide, 1980–2002 [table]. http://crr.bc.edu/images/stories/ Frequently_Requested_Data/table.xls. Congressional Budget Office. 2004a. Disability and retirement: The exit of baby boomers from the labor force. Washington, DC: Congressional Budget Office. ———. 2004b. Retirement age and the need for saving. Washington, DC: Congressional Budget Office. Available at http://www.cbo.gov/ftpdocs/54xx/doc5419/ 05-12-RetireAgeSaving.pdf. Costa, Dora L. 1998. The evolution of retirement: An American economic history, 1880–1990. Chicago: University of Chicago Press. Crimmins, Elaine M. 2001. Americans living longer, not necessarily healthier, lives. Population Today 29 (2): 5, 8. Available at http://www.prb.org/Articles/2001/ AmericansLivingLongerNotNecessarilyHealthierLives.aspx.

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Ellwood, David. 2003. Grow faster together, or grow slowly apart: How will America work in the 21st century? Washington, DC: Aspen Institute Domestic Strategy Group. Available at http://www.aspeninstitute.org/atf/cf/%7BDEB6F227-659B4EC8-8F84-8DF23CA704F5%7D/DSGBROCHURE_FINAL.PDF. European Agency for Safety and Health at Work. 2007. Expert forecast on emerging psychosocial risks related to occupational safety and health. Luxembourg: Office for Official Publications of the European Community. Available at http://osha. europa.eu/publications/reports/7807118/7807118.pdf/at_download/file. Freeman, Richard B. 2006a. Is a great labor shortage coming? Replacement demand in the global economy. National Bureau of Economic Research (NBER) Working Paper No. 12,541. Cambridge, MA: NBER. ———. 2006b. Labor market imbalances: Shortages, or surpluses, or fish stories? Paper prepared for the Boston Federal Reserve Economic Conference ‘‘Global Imbalances: As Giants Evolve,’’ Chatham, MA, June 14–16. Available at http:// www.bos.frb.org/economic/conf/conf51/papers/freeman.pdf. Gendell, Murray. 2008. Older workers: Increasing their labor force participation and hours of work. Monthly Labor Review 131 (1): 41–54. General Accounting Office. 2001. Older workers: Demographic trends pose challenges for employers and workers. Washington, DC: General Accounting Office. Government Accountability Office. 2006. Baby boom generation: Retirement of baby boomers is unlikely to precipitate dramatic decline in market returns, but broader risks threaten retirement security. GAO-06-718. Washington, DC: Government Accountability Office. Haider, Steven, and David Loughran. 2001. Elderly labor supply: Work or play? RAND Labor and Population Program Working Paper Series 01-09. Santa Monica, CA: RAND. Harris Interactive. 2008. Views on retirement. http://www.harrisinteractive.fr/news/2008/ HI_FR_F24-IHT_14mar2008-retirement-english.pdf. Henry J. Kaiser Family Foundation and Hewitt Associates. 2006. Retiree health benefits examined: Findings from the Kaiser/Hewitt 2006 survey on retiree health benefits. Menlo Park, CA: Henry J. Kaiser Family Foundation. Available at http://www.kff.org/medicare/upload/7603.pdf. Hurd, Michael D., James P. Smith, and Julie M. Zissimopoulos. 2003. The effects of subjective survival on retirement and Social Security claiming. Santa Monica, CA: RAND. Available at http://rand.org/labor/DRU/DRU3008.pdf. Hutchens, Robert. 2003. The Cornell study of employer phased retirement policies: A report on key findings. Ithaca, NY: Cornell University, School of Industrial and Labor Relations. Available at http://www.ilr.cornell.edu/extension/files/ 20031219112155-pub1251.pdf. Johnson, Richard W., Gordon B. T. Mermin, and Matthew Resseger. 2007. Employment at older ages and the changing nature of work. Issue Paper 2007-20. Washington, DC: AARP Public Policy Institute. Manton, Kenneth, and S. Gu. 2001. Changes in the prevalence of chronic disability in the United States black and non-black population above age 65 from 1982 to 1999. Proceedings of the National Academy of Sciences USA 103 (48): 18374–79. McMenamin, Terence M. 2007. A time to work: Recent trends in shift work and flexible schedules. Monthly Labor Review 130 (12): 3–15.

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Milbank, Dana. 2007. Smile—you’re on Social Security! Washington Post. October 16. Available at http://www.washingtonpost.com/wp-dyn/content/article/2007/10/15/ AR2007101501359_pf.html. Munnell, Alicia H., and Jerilyn Libby. 2007. Will people be healthy enough to work longer? Issue in Brief, No. 2007-33. Chestnut Hill, MA: Center for Retirement Research. Munnell, Alicia H., and Pamela Perun. 2006. An update on private pensions. Issue in Brief, No. 50. Chestnut Hill, MA: Center for Retirement Research. Munnell, Alicia H., and Mauricio Soto. 2005. How much pre-retirement income does Social Security replace? Issue in Brief, No. 36. Chestnut Hill, MA: Center for Retirement Research. National Center for Health Statistics. 2006. Health, United States, 2006, with chartbook on trends in the health of Americans. Hyattsville, MD: National Center for Health Statistics. Available at http://www.ncbi.nlm.nih.gov/books/bv.fcgi?rid= healthus06. Neumark, David. 2001. Age discrimination legislation in the United States. NBER Working Paper No. 8152. Cambridge, MA: NBER. Social Security Administration, Office of Policy. 2006. Income of the Population 55 or Older, 2004. Washington, DC: GPO. ———. 2007. Annual statistical supplement to the Social Security Bulletin, 2006. Washington, DC: GPO. Steuerle, Eugene, Christopher Spiro, and Richard W. Johnson. 1999. Can Americans work longer? Straight Talk on Social Security and Retirement Policy Brief No. 5. Washington, DC: Urban Institute. Available at http://urbaninstitute.org/Uploaded PDF/Straight5.pdf. Toossi, Mitra. 2007. Employment projections to 2016: More workers in their golden years. Monthly Labor Review 130 (11): 33–54. Uccello, Cori. 1998. Factors influencing retirement: Their implications for raising retirement age. Washington, DC: AARP. U.S. Bureau of the Census. 1975. Historical statistics of the United States, Colonial times to 1979, Part 1. Washington, DC: GPO. ———. 2006. Statistical abstract of the United States, 2007. Washington, DC: GPO. Watson Wyatt Worldwide. 2004. Phased retirement: Aligning employer programs with worker preferences. Washington, DC: Watson Wyatt Worldwide. Weir, David R. 2007. Are baby boomers living well longer? In Redefining retirement: How will boomers fare? ed. Brigitte Madrian, Olivia S. Mitchell, and Beth J. Soldo, 95–111. Oxford: Oxford University Press.

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The Looming Economics of Boomer Health Care CHRISTINE BISHOP

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ill the nation’s health system withstand the baby boomers’ health costs? The answer is surprising. Despite the fact that health spending tends to increase with age, the relative size of the generation born just after World War II has had very little impact on past growth in health expenditures, nor will it be directly responsible for much of the increase that experts forecast for the coming years. Indirectly, the boomers’ demands for improved technology to address the illnesses and conditions of aging will continue to fuel the technological advances that drive much of health expenditure growth, but they are only part of the general demand for new treatments and procedures. The concentration of older adults in publicly funded programs, especially Medicare and Medicaid, will exert exceptional pressure on these vital portions of the nation’s health financing system—certainly a matter for concern. But overall, the aging of the population will not in itself have a major impact on the growth of total health expenditures—the blame for uncontrolled health sector growth falls elsewhere. However, as we think about demographic change and health care costs, there is a second question: Even if the nation’s health system is expected to take on the boomers in stride, are the boomers prepared to afford the health care they need? Here the relentless growth of health expenditures, linked to expanding capacity of the health system to treat illness in new ways, becomes the culprit. We all want to benefit from future health advances,

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which have the potential to mitigate or cure disease and grant years of vital activity into old age. But if elders do not set aside funds for future increases in Medicare and health insurance premiums and increasing obligations to pay out-of-pocket for health services, they will find their basic well-being in retirement eroded by health expenses. IMPACT OF AGING ON HEALTH EXPENDITURES Increases Directly Due to Population Aging Are a Small Proportion of Total Health Expenditure Growth Because Technological Advances Are So Expensive Per-capita personal health expenditures for adults aged 65 and older reached $14,797 in 2004, 3.3 times the per-capita amount spent on working-age adults and 5.6 times the amount for children and adolescents (Hartman et al. 2007). As the U.S. population aged 65 and older grows from 35 million persons in 2000 to a projected 87 million in 2050, multiplying current percapita expenditure for the aged by the number of aged suggests that the onslaught of the baby boom will be responsible for huge increases in health care expenditures. The future elderly are expected to live more years after age 65, further increasing their numbers and the number at advanced ages. Applying current per-capita health expenditures at each post-65 age to the specific life-years the boomers are expected to live past 65 would further increase our back-of-the-envelope estimate of future health expenditures. However, projections of future health expenditures show surprisingly little impact of population aging on the demand for health services. The impact of the boomer aging wave is dwarfed by a rising tide for all health expenditures, driven by technological change and markets with few internal checks on rising costs. Models projecting future health expenditures can expose the moving parts that drive health expenditure growth and show policy makers ways to change future outcomes. The projections themselves are only as good as the relationships built into the models and their assumptions about future trends in the factors that affect health spending. Simple extrapolation of past trends leads to the impossible conclusion that health services will soon commandeer the entire productive capacity of our economy. The model used for the all-important task of projecting the impact of health expenditures on federal spending for Medicare and Medicaid under current law is developed by the Medicare Trustees1 (Boards of Trustees 2007). Projections of spending for these public programs are used as inputs into the model used by the Office of the Actuary to project total health spending (Keehan, Sisko, et al. 2008). The Congressional Budget Office (CBO) has developed a model of health expenditures that assumes that if total health spending growth begins to cause an absolute reduction in real consumption, economic decision makers (including Congress) will change their behavior to avoid this outcome (CBO 2007). All of these projection models include the impact on total

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health expenditures of the expected increase in the number of Americans aged 65 and older as the large numbers in the baby-boom generation cross that threshold. In all of them, the contribution to total expenditure of growth in the age-adjusted cost of services per person (which wraps together both utilization of services and the resource inputs needed for increasingly sophisticated services) far outweighs the contribution of the aging of our society. For example, the Office of the Actuary model finds that the changing age mix of the population will add between 0.4 percent and 0.6 percent to growth over the next decade, with population growth adding 0.8 percent annually—both small in comparison to annual growth rates expected to exceed 6.5 percent (see also Keehan, Lazenby, et al. 2004; Keehan, Sisko, et al. 2008). Population Aging Will Increase Health Spending, But Less Than Might Be Expected, Because Rates of Disability Are Falling and Lifespans Are Lengthening In addition, simple calculations based on the higher costs of current elders would overshoot the mark. Future elders are expected to live longer but also to experience lower rates of disability at each age. Health expenditures in each year of life vary with an individual’s disability status: elders without functional impairments use fewer health resources than those with disabilities. Although there is not a firm consensus, most scholars agree that ageadjusted disability rates have been steadily declining for the over-65 population and that the baby-boomer cohort is approaching retirement age with lower levels of disability (Freedman, Crimmins, et al. 2004; Manton, Gu, and Lamb 2006; Freedman, Schoeni, et al. 2007). The idea is that lifestyle changes and better medical care are postponing the effects of illness, so that both morbidity (clinical illness, functional limitations) and mortality are occurring later in life. With a greater proportion of years disability-free, percapita annual health expenditures should stabilize or even fall (but see Chernew et al. 2005 for a different view). Further, health expenditures in the last year of life represent a substantial proportion of total post-65 spending. Because the amount spent in the last year is lower for older as opposed to younger decedents, this proportion, around 0.3 for cumulative Medicare expenditures, is relatively constant (Lubitz and Riley 1993). Recent studies have reached the surprising conclusion that cumulative post-65 health costs are similar in magnitude regardless of the number of years lived past 65 (Spillman and Lubitz 2000; Lubitz et al. 2003). Thus it appears that older adults with lower prevalence rates for disability at every age and living longer will have annual health costs averaged over remaining life-years that are not much higher, and may even be lower, than current elders (Cutler and Sheiner 1999). This trend is already appearing in current data: between 1987 and 2004, the rate of growth

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of per-capita expenditures for elders aged 85 and older was 20 percent lower than the growth for all persons aged 65 and older (Hartman et al. 2007). Clouding this picture for the longer run is another set of trends, such as the prevalence of diabetes and obesity increase in the younger working-age population (Lakdawalla, Goldman, and Shang 2005; Bhattacharya, Choudhry, and Lakdawalla 2008). Findings of a recent study suggest that the baby-boom generation may be entering retirement years with slightly more chronic illness and lower functional status than previous generations at the same point in the life cycle (Soldo et al. 2006). But the stability of cumulative expenditures should hold even if the next generations of older adults reach 65 with greater rates of disability and mortality risk—cost per year of life would be higher but would be paid for fewer years. Population Aging May Not Play a Large Role in Health Expenditure Growth. But Growth in Expenditures for Everyone Is Driven by Insurance and Technological Advances, and the Path of Future Health Advances Will Likely Be Shaped by Boomers’ Demands Health economists have concluded that at least half of past growth of health expenditures is due to technological advances (Newhouse 1992). Over recent decades, medical knowledge has expanded so that diseases and conditions that previously could not be treated can now be addressed. And when treatments are available, they are used. Resources used per episode of illness increase when health services providers can do more to help patients, who are able to pay for expanded care thanks to growing incomes and insurance. Treatment for heart disease is a good example of the pattern of technological advances. Even by the mid-twentieth century, there was little that medical care could do beyond bed rest and pain relief to treat or prevent heart disease (CBO 2008). Development of coronary angiography allowed physicians to pinpoint the location of disease, and heart-lung machines enabled heart bypass operations. Less invasive angioplasty was developed to open blocked vessels, and its use spread to patients who were not considered candidates for open heart surgery. Stents are now implanted in an effort to keep vessels open, and thrombolytic therapy is used to dissolve clots. All of the interventions that have been added to the medical armamentarium are continually subject to improvement, from the contrast medium used in angiography to the new and improved stents developed each year to new generations of clot-busters. The result has been substantial increases in health care spending, in exchange for substantial improvement in the prognosis of heart disease and many life-years saved; most would agree that the benefits are worth the costs (Cutler and McClellan 2001; Cutler 2007). These advances are available to old and young alike, so per-capita health expenditures rise for everyone. A health sector serving an aging population

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without this technology-driven expansion in per-capita expenditures would experience a much lower rate of growth than we actually expect to see. This is why analysts can say that population aging is not responsible for much of future growth—aging would be important if it were the only source of growth, but in comparison to technological advances, aging is the least of our worries. However, the baby-boom cohort represents a large market for goods and services of all kinds. When they reach age 65, they will be nearly universally insured by Medicare, which will provide the buying power to respond to many of the health needs of aging. An expanding market for aging health services can be expected to continue the drive toward technological advances that address conditions prevalent among the aging. Advances in basic science form the foundation for all new medical technology, but insurance coverage for diagnostic tests and treatments tilts technological advances toward new approaches that use covered or insurable health services (Weisbrod 1991). For example, the development and refinement of surgical techniques has made surgical interventions safer and more effective, while increasing the number of older adults (and others) benefiting from gall bladder surgery, cataract surgery, joint replacement, and heart surgery (Escarce, Bloom, and Hillman 1995; Lavernia, Lee, and Hernandez 2006). These procedures have become old news, an accepted part of medicine’s armamentarium, with new developments ahead. In the area of pharmaceutical interventions, we have seen an array of medical discoveries that result in lifetime drug treatment once a chronic condition is diagnosed. Physicians are now able to treat high cholesterol before the patient has symptoms of heart disease or any adverse effects. Hypertension can be addressed before the patient experiences a stroke. Some cancers are no longer acute, life-ending illnesses, but rather have become chronic diseases, requiring lifetime treatment. Drug treatments are attractive targets for research and development in part because increasing numbers of people hold insurance for prescription drugs and thus can pay for lifetime treatment. There is not as much impetus for research on lifestyle modifications and alternative remedies that cannot be patented. Further, health insurance has developed to pay for definable, expensive health interventions for illness, and tends not to encourage the health awareness, lifestyle coaching, and watchful waiting that may also support healthy living and conservative treatment. On the whole, though, it can be exhilarating to gaze into the crystal ball of future medical innovations, even though costs may seem overwhelming. Knowledge of our genome opens many possibilities: if the drug likely to work best for each patient could be selected based on his or her own genetic markers, time to effective treatment and negative side effects would be reduced. So-called biologics, produced using biotechnological methods, are being developed to treat currently untreatable conditions, but are so difficult

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to produce and so narrowly targeted to small numbers of individuals that they will cost thousands of dollars for a course of treatment. Benefits could be many times costs—but costs will rise. Americans value sophisticated health services, and analysts argue that advances in health services and the high spending that brings these advances to patients are exactly how we want to spend a rising portion of our growing national income (Cutler and McClellan 2001). There has been little political will to rein in health costs—even those that appear to be wasteful—and even less determination to slow the development of new diagnostic techniques, surgical procedures, and medicines (CBO 2008). The RAND Corporation developed a microsimulation model that used the actual health status for current elders by age to model transitions among health and disability states, yielding the rates at which the elder population acquires chronic illness diagnoses and functional disabilities (Goldman, Shekelle, et al. 2004). Health services use was then estimated for each disease/disability state, both under the current state of medical knowledge technology and with advances in medical treatment. The microsimulation approach builds up end results by running simulated individuals through many lifetimes. This gives simulation models the ability to account for the fact that even if a medical breakthrough prevents, cures, or ameliorates a given disease or chronic condition, elders who would have suffered from the conquered disease in 2015 or 2030 will still be subject to all the remaining causes of disability and mortality. The RAND model focused specifically on the possibilities of new medical advances, which might work so well that they return ill patients to good health or, as has happened in the past, may provide continuing treatment for ongoing diseases that previously have not been as well addressed. Advances that prevent or cure disease (Thomas’s [1971, 1974] ‘‘full’’ technologies) can be very costly and still be preferable to treatments that ameliorate disease states (‘‘halfway’’ technologies). Cancer vaccines are one example of a ‘‘full technology’’ on the horizon; the RAND team estimated that if cancer vaccines were developed and available to Medicare beneficiaries, treatment cost would increase health spending over the status quo by 0.1 percent in 2015 and 0.4 percent in 2030—with a cost per additional lifeyear of about $18,000. In contrast, development and use of pacemakers for atrial fibrillation would increase health spending by 2.2 percent and were projected to cost $1.4 million per life-year saved. Development and use of anti-angiogenesis drugs to treat solid tumor cancers would increase health costs between 8 percent and 9 percent and result in benefits projected to cost about half a million dollars per life-year saved. The engines of technological change are fueled by science and by the waiting market, and our society has been willing to pay their price. The recent expansion of the indications for approved use of Avastin, a drug developed to treat colon cancer, shows these trends at work today (as

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predicted by Goldman, Shang, et al. 2005; Pollack 2008). The Food and Drug Administration (FDA) has now approved Avastin for use in treating breast cancer, where it is typically added to an already expensive and demanding chemotherapy regimen at an additional cost of approximately $7,700 per month. A clinical trial demonstrated that inclusion of Avastin in chemotherapy lengthened the time to worsening of cancer or death, from 5.8 months with the standard treatment to 11.3 months with the combination. However, the women receiving Avastin had no significant improvement in survival. FDA approval carries with it coverage under drug insurance plans, including Medicare Part D, reducing the hesitation of physicians to prescribe and patients to accept a treatment that appears to offer marginal benefits at great cost. The costs will soon be shared by everyone paying drug insurance premiums, as well as by patients subject to copayments for their treatment. Aging of the Population Will Shift Expenditures to Medicare and Medicaid Although the aging of the population is not projected to overwhelm total health spending growth in itself, as the baby-boom generation begins to stream over the 65-year age threshold, their impact will be felt in Medicare and Medicaid, the two major government programs that finance health care. But again, the impact of their aging numbers will be dwarfed by overall growth in per-capita spending due to other causes. Enrollment in Medicare has already started to grow. Over most of its history, Medicare has added an average of about 600,000 net beneficiaries a year (Boards of Trustees 2007, table III.A.3, p. 34). As the postwar babies reach 65 over the next few years, that number will rise, growing to over a million starting in 2011 and averaging 1.5 million over the next twenty years. By 2040, enrollment will be almost double what it is today. But the CBO estimates that, like its impact on overall health spending, population aging alone will have a relatively small impact on federal spending on Medicare. It assesses that the increased numbers of the baby boomers will be responsible for only about a quarter of the projected increase in federal Medicare and Medicaid spending (net of beneficiary premiums) relative to gross domestic product (GDP) (CBO 2007, 14; see also Potetz 2008). In the next decades, the influx of baby boomers will actually skew the age distribution of Medicare enrollees toward younger ages. When combined with falling age-specific rates of disability, this should reduce per-capita Medicare expenditures below what they otherwise would have been (Bhattacharya, Cutler, et al. 2004). Of course, over time the per-capita spending increases that afflict all health spending will be magnified by the growing number of enrollees, so the CBO projects that Medicare spending net of premiums will grow from 3 percent of GDP in 2006 to 6 percent by 2030 and will reach 15 percent in fifty years under current law (computed by Potetz 2008).2

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Medicaid, the state-federal program aimed at covering health services for specified categories of the poor, will also feel the age wave. Elders 65 and older form one of the categories of persons that Medicaid serves when they meet a means test, so Medicaid enrollment will grow. In 2006, elders were 9.6 percent of Medicaid beneficiaries, but used 22.6 percent of benefits, mostly for long-term care services, which are not covered by Medicare or private health insurance (Gleckman 2007). If the baby-boom generation reaches old age even less well prepared to meet long-term care expenses than current elders, the proportion of elders eligible for Medicaid could increase. Further, Medicaid-eligible elders with a strong preference for remaining in their own homes rather than entering a nursing home have avoided seeking Medicaid-funded services, because many state Medicaid programs formerly paid for long-term care only when a beneficiary was using nursing home care. In the past decade, state Medicaid programs have been expanding the options for services provided at home, a policy likely to address many unmet needs of eligible elders, at lower cost per person served than nursing home care. But by making Medicaid services more palatable, this policy will likely expand total Medicaid long-term care expenditures. There are some mitigating factors, however. Although the cost of serving long-term care recipients will grow with wage growth throughout the economy, the long-term care sector offers fewer opportunities for quality-increasing high-tech advances than the acute health sector. In addition, prescription drugs, a category of health services very much a vehicle for expensive technological advances, have been shifted from Medicaid to Medicare. These factors, and falling rates of age-adjusted disability, suggest that Medicaid spending for elders will not explode out of control. Recent projections show Medicaid spending rising from 2.6 percent of GDP in 2006 to 4.1 percent in 2025 and 6.5 percent by 2045, but most of this growth is focused on other populations that Medicaid serves, with little due directly to increased spending on the aged population (Kronick and Rousseau 2006; CBO 2006). IMPACT OF RISING HEALTH EXPENDITURES ON THE BOOMERS Americans apparently are unwilling to slow the growth of health expenditures by slowing technological advances or reining in possibly wasteful spending. But this means that even older adults, who are better insured than younger populations for many health needs, will find personal health costs increasingly burdensome. Retired boomers may be less prepared than they expect to meet health and related needs. Many Older Adults Currently Spend a Substantial Proportion of Income on Health Insurance Premiums, Copayments, and Uncovered Health Services Medicare does not cover all health costs, and elders can face substantial out-of-pocket expenses. Some Medicare beneficiaries currently spend

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substantial amounts out-of-pocket on Medicare and private health insurance premiums, deductibles and copayments that are part of insurance plan design, and on services, such as long-term care, that are not covered by insurance. And retirees are in a difficult situation—they cannot rely on future earnings growth or adjustments in work behavior to meet unexpected health spending needs. Median out-of-pocket health care spending for community-dwelling older households was almost $2,300 in 2002; over three-fifths of this went to pay Medicare and private premiums (Johnson 2006). The median elderly household spent 11.8 percent of income on health care. Out-of-pocket spending as a proportion of income was highest for those without additional insurance and those relying on individually purchased Medigap insurance, lower for those covered by employer-sponsored insurance plans, and lowest for Medicaid beneficiaries, who pay neither premiums nor copayments. If they were steady and predictable, even expenditures of this magnitude relative to income could be part of retirement planning. But health expenditures are not evenly distributed: almost one-sixth of community-dwelling households spent more than a third of their income on health care (Johnson 2006, table A-22). And of course it is the oldest and sickest elders who have the largest out-of-pocket bills in relation to their incomes (Johnson 2006, table A-22; Schoenberg et al. 2007). By examining spending in relation to income for community-resident elders only, we can understand the extent to which the out-of-pocket health costs reduce their ability to pay for other necessities (housing and food, for example) and thus reduce quality of life. Elders who have moved into a nursing home generally do not have so many other spending needs, and so may be considered able to devote a larger proportion of income to health services, which then cover their room and board. However, an overall evaluation of the risks to retirement security posed by rising health costs should also include long-term care expenditures, which are not covered by private insurance or Medicare and thus may be catastrophic for elders not eligible for Medicaid. A study using the Medicare Current Beneficiary Survey was able to calculate the portion of income spent on health services and premiums for all beneficiaries, including institutional residents (Desmond et al. 2007; Neuman et al. 2007). Because income tends to fall and out-of-pocket health expenditures to increase with age, the median percentage of income spent on health was 13.8 percent for all adults aged 65 to 74, rising to 22.2 percent for beneficiaries 85 and older; the top decile of the spending distribution spent more than 58 percent of their income on health insurance premiums, copayments, and uncovered health services, including long-term care.3 The medians and average health expenditure figures, even when expressed as a proportion of income, hide a particular vulnerability of couples: if one member of a couple experiences a typically expensive last illness,

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the surviving spouse may find herself or himself in much-reduced economic circumstances. Income falls after widowhood due to provisions in Social Security and private pensions, and the impact of a spouse’s terminal-year health expenditures on the economic well-being of the survivor can compound these losses (McGarry and Schoeni 2005a, 2005b). The Burden of Uncovered Health Expenditures Is Likely to Be Heavier for Future Elders With many Medicare beneficiaries already facing substantial out-of-pocket costs, the future increases in health expenditures do not bode well for the baby boomers. First, this generation will have less help from employers in paying premiums for insurance to supplement Medicare. Already Medicare beneficiaries covered by employer-provided supplementary insurance have seen their median mandatory premium contributions more than triple between 1998 and 2002 (Johnson 2006). And corporate commitments to postretirement health insurance coverage, which have been eroding for many years, are becoming increasingly uncertain as costs rise, Part D subsidies for corporate insurance continuation play out, and rules change. A recent analysis attempts to put a number on the uninsured liability represented by uncovered costs, rising premiums, and disappearing coverage, estimating that a couple would need to save an additional $550,000 to cover these costs through age 95 (Fronstin 2006). Such an estimate is useful to call attention to the threat that relatively predictable rising health costs pose to retirement wealth, but even this large figure cannot be guaranteed to protect elders from the variability of expenditure needs and the possibility of expenditure catastrophe. Medicare itself has design features that will place financial burdens on future elders. Premiums for Part B and Part D are required by statute to rise with costs, because no more than a fixed proportion of program costs can be funded out of general revenues. Copayments set at a percentage of costs (for example, 20 percent for the ambulatory care services covered by Medicare Part B and 5 percent for prescription drug expenses over Part D’s catastrophic limit) will rise with physician and pharmacy prices. Prices for drugs that are heavily used by Medicare beneficiaries are already experiencing large increases, suggesting that current estimates of future Part D premiums may be too low (Frank and Newhouse 2008). In addition, elders will pay increasing taxes along with all taxpayers as an increasing amount of Medicare costs is financed by general revenues (Munnell 2007). Out-of-pocket health expenditures as a share of after-tax income will only increase. Long-term care costs, discussed elsewhere in this volume, are not covered by Medicare or private health insurance and thus can represent a substantial portion of uncovered health services, especially for the oldest elderly with incomes and assets above Medicaid eligibility thresholds. Long-term care services assist persons with disabilities in carrying out daily activities and by

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definition require time from another human being—these tasks cannot be accomplished by a device, a computer, or a drug. This means that technological advances will probably not push the prices of paid long-term care services higher, but as productivity increases throughout the economy drives general wages higher, the wages of personal care labor employed in this service industry must follow, because workers must be paid enough to keep them in carework (Baumol 1967). In addition, we can hope that the quality of care and quality of life available to future elders will exceed what is currently on offer, and improvements are likely to add to the cost of care. Most important, future elders will need to pay for more of the services they need, because unpaid care from family is expected to become less available (Johnson, Toohey, and Wiener 2007). Finally, retirement income prospects for the baby boomers are not all rosy, especially for those surviving to the oldest ages when out-of-pocket health expenses are expected to be greatest (Butrica, Smith, and Toder 2002; Butrica, Iams, and Smith 2004; Butrica, Cashin, and Uccello 2005; Butrica, Goldwyn, and Johnson 2005). There is substantial variability in the net worth of the boomers as they approach retirement, and a large proportion of this generation’s wealth is in housing wealth, which may become more uncertain in the near term (Lusardi and Mitchell 2007). Bringing together trends in retirement income and the relentless increase in health costs that drives insurance coverage, premium costs, out-of-pocket spending, and taxes, Johnson and Penner (2004) use the Urban Institute’s microsimulation model to assess the impact of these forces on future elders. The news is not good: they conclude that although the income of older adults is poised to keep pace with income growth throughout the economy, their spending power will be curtailed by the rise in out-of-pocket health spending, for both premiums and health service, and by the tax increases required by current law as Medicare expenses rise. They estimate that elders’ after-tax income net of health spending will do no more than stay steady in real terms, as older couples spend 35 percent of their after-tax income on health services by 2030, and unmarried older adults, with lower incomes and more help from Medicaid, spend three-tenths of after-tax income on health. If health spending trends cannot be altered, the boomers will find the gains of productivity growth and lifetime saving obliterated. CONCLUSION If we can see a disaster coming, we can prepare for it. The baby boomers’ age wave has been predictable since their births between 1946 and 1964. But it turns out that within the larger trends of overall health expenditure growth, the impact of population aging on health resource use will be more a pop than a boom. However, as technological advances drive health expenditures’ growth, the amount that households must budget for premium payments and both expected and unexpected out-of-pocket spending will increase,

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causing special burdens for retirees with little room to maneuver financially. The real challenge, for both the boomers and society as a whole, will be finding a way to contain health expenditure growth itself, so that we can sustain health and garner the health benefits of scientific advances while still maintaining or even increasing resources for other desired goods and services. NOTES 1. Formally the Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. 2. The Trustees’ estimates were made on a slightly different basis and differ somewhat, but are still very large: they estimate that federal spending on Medicare will grow from 3.1 percent of GDP in 2006 to 6.3 percent in 2030 and 11.3 percent fifty years later (Boards of Trustees 2007). 3. In these studies based on the Medicare Current Beneficiary Survey, income was computed per person by dividing household income among household members. Other studies attempting to estimate the amount and distribution of elders’ outof-pocket health costs, providing evidence on the impact of health costs on their well-being, include Crystal et al. 2000; Maxwell, Moon, and Segal 2001; Goldman and Zissimopoulos 2003; Caplan and Brangan 2004; Butrica, Goldwyn, and Johnson 2005; Burham 2007; and Social Security Administration 2007.

REFERENCES Baumol, W. J. 1967. The macroeconomics of unbalanced growth: The anatomy of urban crisis. American Economic Review 57:415–26. Bhattacharya, J., K. Choudhry, and D. Lakdawalla. 2008. Chronic disease and severe disability among working-age populations. Medical Care 46 (1): 92–100. Bhattacharya, J., D. M. Cutler, D. P. Goldman, M. D. Hurd, G. F. Joyce, D. N. Lakdawalla, C. W. Panis, and B. Shang. 2004. Disability forecasts and future Medicare costs. Front Health Policy Research 7:75–94. Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. 2007. 2007 annual report of the Boards of the Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance trust funds. Available at http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2007.pdf. Burham, K. 2007. Expenditures of the aged. Social Security Bulletin 67 (1): 45. Butrica, B. A., D. B. Cashin, and C. E. Uccello. 2005. Projections of economic well-being for Social Security beneficiaries in 2022 and 2062. Social Security Bulletin 66 (4): 1. Butrica, B. A., J. H. Goldwyn, and R. W. Johnson. 2005. Understanding expenditure patterns in retirement. Center for Retirement Research Working Paper No. 200503. Available at http://crr.bc.edu/images/stories/Working_Papers/wp_2005-03.pdf. Butrica, B. A., H. M. Iams, and K. E. Smith. 2004. It’s all relative: Understanding the retirement prospects of baby boomers. Paper prepared for the National Academy of Social Insurance Annual Conference. Butrica, B. A., K. Smith, and E. Toder. 2002. Projecting poverty rates in 2020 for the 62 and older population: What changes can we expect and why? Center for

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Retirement Research Working Paper No. 2002-03. Available at http://crr.bc.edu/ working_papers/projecting_poverty_rates_in_2020_for_the_62_and_older_population_ what_changes_can_we_expect_an.html. Caplan, C., and N. Brangan. 2004. Out-of-pocket spending on health care by Medicare beneficiaries age 65 and older in 2003. AARP Public Policy Institute Data Digest No. 101. Available at http://assets.aarp.org/rgcenter/health/dd101_ spending.pdf. CBO (Congressional Budget Office). 2006. Medicaid spending growth and options for controlling costs. Statement of Donald B. Marron, Acting Director, before the Special Committee on Aging, U.S. Senate, July 13, 2006. ———. 2007. The long-term outlook for health care spending. Available at http:// www.cbo.gov/ftpdocs/87xx/doc8758/11-13-LT-Health.pdf. ———. 2008. Technological change and the growth of health care spending. Pub. No. 2764. Available at http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-Tech Health.pdf. Chernew, M. E., D. P. Goldman, F. Pan, and B. P. Shang. 2005. Disability and health care spending among Medicare beneficiaries. Health Affairs 24 (6): W5R42–W5R52. Crystal, S., R. W. Johnson, J. Harman, U. Sambamoorthi, and R. Kumar. 2000. Outof-pocket health care costs among older Americans. Journals of Gerontology Series B: Psychological Sciences and Social Sciences 55 (1): S51–S62. Cutler, D. M. 2007. The lifetime costs and benefits of medical technology. Journal of Health Economics 26 (6): 1081–1100. Cutler, D. M., and M. McClellan. 2001. Is technological change in medicine worth it? Health Affairs (Millwood) 20 (5): 11–29. Cutler, D. M., and L. Sheiner. 1999. Demographics and medical care spending: Standard and non-standard effects. In Demographic change and fiscal policy, ed. A. Auerbach and R. Lee, 253–91. Cambridge: Cambridge University Press. Desmond, K. A., T. Rice, J. Cubanski, and P. Neuman. 2007. The burden of out-of-pocket health spending among older versus younger adults: Analysis from the Consumer Expenditure Survey, 1998–2003. Kaiser Family Foundation Issue Brief. Available at http://www.kff.org/medicare/upload/7686.pdf. Escarce, J., B. Bloom, and A. Hillman. 1995. Diffusion of laparoscopic cholecystectomy among general surgeons in the United States. Medical Care 33 (3): 256–71. Frank, R. G., and J. P. Newhouse. 2008. Should drug prices be negotiated under part D of Medicare? And if so, how? Health Affairs (Millwood) 27 (1): 33–43. Freedman, V. A., E. Crimmins, R. F. Schoeni, B. C. Spillman, H. Aykan, E. Kramarow, K. Land, et al. 2004. Resolving inconsistencies in trends in old-age disability: Report from a technical working group. Demography 41 (3): 417–41. Freedman, V. A., R. F. Schoeni, L. G. Martin, and J. C. Cornman. 2007. Chronic conditions and the decline in late-life disability. Demography 44 (3): 459–77. Fronstin, P. 2006. Savings needed to fund health insurance and health care expenses in retirement. Employment Benefits Research Institute Issue Brief No. 295. Available at http://www.ebri.org/pdf/briefspdf/EBRI_IB_07-20061.pdf. Gleckman, H. 2007. Medicaid and long-term care: How will rising costs affect services for an aging population? Issue in Brief, No. 7-4. Chestnut Hill, MA: Center of Retirement Research. Available at http://crr.bc.edu/images/stories/Briefs/ ib_2007-4.pdf.

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Goldman, D. P., B. P. Shang, J. Battacharya, A. M. Garber, M. Hurd, G. F. Joyce, D. N. Lakdawalla, C. Panis, and P. G. Shekelle. 2005. Consequences of health trends and medical innovation for the future elderly. Health Affairs 24 (6): W5R5–W5R17. Goldman, D. P., P. G. Shekelle, J. Bhattacharya, M. Hurd, G. F. Joyce, D. N. Lakdawalla, D. H. Matsui, S. J. Newberry, C. W. A. Panis, and B. Shang. 2004. Health status and medical treatment of the future elderly. Final Report TR-169-CMS. Prepared for the Centers for Medicare and Medicaid Services by the RAND Corporation. Goldman, D. P., and J. M. Zissimopoulos. 2003. High out-of-pocket health care spending by the elderly. Health Affairs (Millwood) 22 (3): 194–202. Hartman, M., A. Catlin, D. Lassman, J. Cylus, and S. Heffler. 2007. U.S. health spending by age, selected years through 2004. Health Affairs (Millwood). Johnson, R. W. 2006. Health insurance coverage and costs at older ages: Evidence from the health and retirement study. AARP Public Policy Institute Research Report No. 2006-20. Johnson, R. W., and R. G. Penner. 2004. Will health care costs erode retirement security? Issue in Brief, No. 23. Chestnut Hill, MA: Center of Retirement Research. Available at http://crr.bc.edu/images/stories/Briefs/ib_23.pdf. Johnson, R. W., D. Toohey, and J. M. Wiener. 2007. Meeting the long-term care needs of the baby boomers: How changing families will affect paid helpers and institutions. Retirement Project Discussion Paper No. 07-04. Available at http:// www.urban.org/UploadedPDF/311451_Meeting_Care.pdf. Keehan, S. P., H. C. Lazenby, M. A. Zezza, and A. C. Catlin. 2004. Age estimates in the national health accounts. Health Care Financing Review Web Exclusive 1 (1): 1–16. Keehan, S., A. Sisko, C. Truffer, S. Smith, C. Cowan, J. Poisal, M. K. Clemens, and N.H. Accounts Projections Team. 2008. Health spending projections through 2017: The baby-boom generation is coming to Medicare. Health Affairs (Millwood). Kronick, R., and D. Rousseau. 2006. Is Medicaid sustainable? Spending projections for the program’s second forty years. Health Affairs (Millwood) 26:W271. Lakdawalla, D. N., D. P. Goldman, and B. Shang. 2005. The health and cost consequences of obesity among the future elderly. Health Affairs (Millwood) 24, suppl. 2: W5R30–W5R41. Lavernia, C., D. J. Lee, and, V. H. Hernandez. 2006. The increasing financial burden of knee revision surgery in the United States. Clinical Orthopaedics and Related Research 446:221–26. Lubitz, J., L. M. Cai, E. Kramarow, and H. Lentzner. 2003. Health, life expectancy, and health care spending among the elderly. New England Journal of Medicine 349 (11): 1048–55. Lubitz, J. D., and G. F. Riley. 1993. Trends in Medicare payments in the last year of life. New England Journal of Medicine 328 (15): 1092–96. Lusardi, A., and O. S. Mitchell. 2007. Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics 54 (1): 205. Manton, K. G., X. Gu, and V. L. Lamb. 2006. Change in chronic disability from 1982 to 2004/2005 as measured by long-term changes in function and health in the

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U.S. elderly population. Proceedings of the National Academy of Science USA 103 (48): 18374–79. Maxwell, S., M. Moon, and M. Segal. 2001. Growth in Medicare and out-of-pocket spending: Impact on vulnerable beneficiaries. Urban Institute. Available at http://www.commonwealthfund.org/usr_doc/ maxwell_increases_430.pdf?section=4039. McGarry, K., and R. F. Schoeni. 2005a. Medicare gaps and widow poverty. Social Security Bulletin 66 (1): 58. ———. 2005b. Widow(er) poverty and out-of-pocket medical expenditures near the end of life. Journals of Gerontology Series B: Psychological Sciences and Social Sciences 60B (3): S160. Munnell, A. H. 2007. Medicare costs and retirement security. Issue in Brief, No. 714. Chestnut Hill, MA: Center of Retirement Research. Available at http:// crr.bc.edu/images/stories/Briefs/ib_7-14.pdf. Neuman, P., J. Cubanski, K. A. Desmond, and T. H. Rice. 2007. How much ‘‘skin in the game’’ do Medicare beneficiaries have? The increasing financial burden of health care spending, 1997–2003. Health Affairs (Millwood) 26 (6): 1692–1701. Newhouse, J. P. 1992. Medical care costs: How much welfare loss? Journal of Economic Perspectives 6 (3): 3–21. Pollack, A. 2008. F.D.A. extends Avastin’s use to breast cancer. New York Times. February 23. Potetz, L. 2008. Financing Medicare: An issue brief. Kaiser Family Foundation Pub. No. 7731. Available at http://www.kff.org/medicare/upload/7731.pdf. Schoenberg, N. E., H. Kim, W. Edwards, and S. T. Fleming. 2007. Burden of common multiple-morbidity constellations on out-of-pocket medical expenditures among older adults. Gerontologist 47 (4): 423–37. Social Security Administration. 2007. Expenditures of the aged chartbook. Available at http://www.socialsecurity.gov/policy/docs/chartbooks/expenditures_aged/index. html. Soldo, B. J., O. S. Mitchell, R. Tfaily, and J. F. McCabe. 2006. Cross-cohort differences in health on the verge of retirement. National Bureau of Economic Research (NBER) Working Paper No. 12,762. Cambridge, MA: NBER. Spillman, B. C., and J. Lubitz. 2000. The effect of longevity on spending for acute and long-term care. New England Journal of Medicine 342 (19): 1409–15. Thomas, L. 1971. The technology of medicine. New England Journal of Medicine 285 (24): 1366–68. ———. 1974. The lives of a cell: Notes of a biology watcher. New York: Viking. Weisbrod, B. A. 1991. The health care quadrilemma: An essay on technological change, insurance, quality of care, and cost containment. Journal of Economic Literature 29 (2): 523–52.

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III BOOMERS AND THE NEW POLITICS OF AGING

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7

Public Policy and the Boomers: An Expanding Scope of Conflict ROBERT B. HUDSON

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aby boomers about to enter old age will encounter a public policy landscape that would have been virtually unrecognizable to their grandparents. Programs that either did not exist or were only in their infancy are now enormous and entrenched. Older people, who were once little more than a residual demographic category, have now developed a political self-identity that has made them a formidable presence in national politics. And this combination of large public programs and growing political identity has led to the creation of more than fifty age-related interest groups in Washington, an assemblage so large that the groups have had to form their own organization. This chapter explores the world of public policy that the boomers are likely to experience and the political role they may play in helping to shape that world. As we are repeatedly informed, the boomers in old age will make a profound impact on institutions of all kinds, political ones included. In the following chapter, Robert Binstock reviews the potential presence the boomers may have in American political life. Here, we review the current public policy arena on aging, how it developed, and what accounts for the particular dimensions it has assumed. As we will see, both the prominence and understanding of policies on aging have undergone a profound reassessment in recent decades, and the boomers will enter into a more contested aging-policy arena than that experienced by earlier generations.

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During the period 2010–2030, the boomers will surely assume a very prominent public role, but they will do so in an environment where economic and political pressures are bearing down on the major age-related programs, notably Social Security and Medicare. Ironically, the pressures building on these programs result, in part, from the very successes that they have had in improving the well-being of older people. Thus, the boomers will face a policy world in which a growing chorus of critics asks whether the programs are affordable and if they are all necessary. For their part, the boomers will be well positioned to defend the programs because, while older people were once singularly needy (and thus seen as especially deserving), they are now significantly better off (and thus able to mobilize impressive political resources on their own behalf). Thus, the growing pressures both to curtail and to preserve current benefits for the rising elder boomer cohort represent something of a political ‘‘perfect storm.’’ THE DEVELOPMENT OF SOCIAL POLICY FOR OLDER AMERICANS Social policies were slow to develop in the United States, initially including those directed at older Americans. Frequently noting a pattern of ‘‘American exceptionalism’’ (Lipset 1996) in comparison to developments in other countries, analysts have referred to the United States as being a ‘‘welfare laggard’’ (Orloff 1988) or as having created ‘‘a reluctant welfare state’’ (Wilensky and Lebeaux 1958). Yet, within this generally delayed framework, policies for older Americans generally came sooner, were funded more generously, and grew faster than programs directed at other populations or problems. With the notable exception of Civil War pensions (Skocpol 1993), the federal government had very little presence in social welfare prior to the twentieth century. Local and state governments played limited and often punitive roles through such institutions as asylums, sanitariums, poorhouses, reform schools, and state mental hospitals (Katz 1996). Charity offered in community settings (so-called outdoor relief) was exclusively the province of private philanthropy. Modest expansion of public activity took place during the early twentieth century through the efforts of the Progressive movement, which focused attention on child labor and ‘‘mothers’ pension’’ legislation assisting young widows with children. Aging Policy Development: The Expansionary Period The New Deal of the 1930s brought the national government into the business of social welfare on an unprecedented scale, and the needs of older Americans were prominently featured in these efforts. The Social Security Act was the crowning achievement of these efforts, with Title I of the Act establishing Old Age Assistance for the poor aged, and Title II establishing Old Age Insurance, the cornerstone of today’s Social Security system.

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The salience of these two programs was based on the dire and unquestioned needs of the elderly during the Depression, bringing into stark relief the great historical fear associated with old age, namely, that of outliving one’s income. In the absence of individual wealth or family supports, individuals in old age were left largely to the mercies of private charity or public alms. At the time of Social Security’s enactment, it is estimated that just over half of all cash income that older people received came from their adult children (Upp 1982). Today, thanks largely to Social Security, that figure is down to less than 3 percent (Federal Interagency Forum on Aging-Related Statistics 2007). The New Frontier/Great Society era of presidents John Kennedy and Lyndon Johnson was the next watershed period in social policy. Scores of mainly small services programs were initiated on behalf of a variety of groups, such as the unemployed, welfare recipients, residents of both innercity and rural areas, and the sick. What ultimately emerged as the two largest programs passed at the time were health care programs directed either exclusively (Medicare) or significantly (Medicaid) to seniors. After income needs, health care concerns were the biggest worry of older people and their families, and this concern was widely recognized at the time. Advocates for national health insurance settled on the elderly to be sole beneficiaries in order to assure passage of some form of governmentally financed health care. As for Medicaid—a means-tested public assistance program—it has become the largest payer in the country of older people’s long-term care needs. The expansion of public programs for the aged continued into the 1970s, making the 1965–1974 period something of a ‘‘golden decade’’ for older people. In addition to Medicare and Medicaid, this ten-year period saw the passage of the Older Americans Act in 1965 (and creation of the ‘‘aging network’’ of social service agencies), the Age Discrimination in Employment Act in 1967, the Supplemental Security Income (SSI) program in 1972, and the Employee Retirement Income Security Act (ERISA) in 1974. The decade also witnessed creation of the National Institute on Aging within the National Institutes of Health, a cumulative 70 percent increase in Social Security benefits between 1967 and 1972, and inflation protection for beneficiaries through a provision tying future benefit increases to increases in the cost-of-living index. The mid-1970s represented the high-water mark for enacting programs on behalf of older Americans and other social policy constituencies as well. Indeed, analyses covering a number of Western nations find the mid-1970s to be a breakpoint between expansionary and retrenching phases of welfare state development (Pierson 1995; Myles and Quadagno 2002). In the United States, events pressuring programs across the board included the Vietnam War, the residual effects of the Watergate scandal, the economic shocks produced by the oil embargo of the early 1970s, a period of economic

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‘‘stagflation’’ that lasted most of the decade, and a malaise about the ability of the federal government during the presidencies of Gerald Ford and Jimmy Carter to address rising economic and social concerns. Yet additional factors weighed in particular on aging-related programs during this period. First, expenditures under the big entitlement programs—Social Security and Medicare—were now growing faster than had historically been the case and, at least in the near term, were outpacing the payroll tax revenues used to sustain the programs (Greenspan Commission 1983). Second, there was a growing awareness that longer-run demographic trends were going to increase these fiscal pressures over time. So long as the baby boomers were in the active labor force—which would extend from the mid-1960s when the early boomers hit adulthood until the 2010s when they would begin retiring—these pressures would be manageable. But it was realized as inevitable that the retirement of the baby boomers and the attainment of adulthood by a much smaller ‘‘Generation X’’ cohort (born between 1965 and 1981) would dramatically transform the fiscal underpinnings of Social Security and Medicare. Third, it was also becoming clear that health care inflation and the costs of new medical technology were leading to much faster expenditure growth under Medicare than had been anticipated when the program was enacted. After growing only marginally in its early years, Medicare expenditures grew at an annual rate of 17 percent between 1970 and 1980, and continued to grow at an annual rate of more than 11 percent during the 1980s (Center for Medicare and Medicaid Services 2007). Concerns about future expenditure growth have certainly been borne out since, Medicare costs having risen from $109 billion in 1990 to $401 billion in 2006. As a result of these combined pressures, the next wave of aging-related legislation was restrictive rather than expansionary. In 1977, President Carter signed a bill that increased the payroll tax rather than liberalized benefits, representing the first restrictive legislation in Social Security’s history. In 1983, the so-called Greenspan Commission (1983) designed a package, subsequently enacted by Congress, whereby Social Security payroll tax increases were accelerated, new state and local workers were brought into the system, the cost-of-living adjustment was delayed for six months, and taxation of Social Security benefits of higher-income beneficiaries was introduced for the first time. At roughly the same time, a new ‘‘prospective payment’’ reimbursement system for hospitals was introduced into Medicare, again designed to rein in costs. In the late 1980s, an attempt was made to add new catastrophic coverage, long-term care protections, and spousal safeguards as part of the Medicare Catastrophic Coverage Act (MCCA) (Himelfarb 1995). While adding these benefits would clearly be expansionary, the financing requirement built into the law—insisted upon by President Ronald Reagan—was that older people themselves would have pay for these added benefits through income tax

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surcharges to be levied on upper-income seniors. Insisting on intragenerational financing, rather than continuing to rely on intergenerational financing through the payroll tax, proved to be both conceptually and politically controversial. While analysts debated the former concern, older people and their advocacy groups mounted a ferocious mobilization against the proposed tax. They created such a firestorm that the MCCA was repealed less than a year into its existence. The MCCA episode illustrated the political muscle older people were capable of exercising around issues of direct concern to them. It also represents a first chapter in the more contentious politics of aging that have now emerged and which will very much mark the coming experience that older boomers will have in the political arena. The next major aging-policy episode took place in the mid-1990s, when the ‘‘Republican Class of 1994’’ attempted to cut the future growth of Medicare and Medicaid by a total of $400 billion over a ten-year period (Smith 2002). This led to a drawn-out battle with President Bill Clinton, resulting in the temporary shutdown of the federal government in 1997. In the end, the Clinton position prevailed, but again the newly contested politics of aging were in full view. Victory here meant avoiding expenditure cuts, not expanding enrollee benefits. The growing politicization of aging-related policy was seen in the debate leading to passage of Medicare Part D, the prescription drug legislation that has been the biggest expansion in Medicare since its inception. Eager to make inroads into the older voting constituency, Republicans had been promoting drug legislation and made it a major issue in the 2000 and 2002 elections. Because of the Republican sponsorship and particular aspects of the plan, Democrats found themselves in the awkward position of opposing this major addition to the program. But there were tensions on both sides of the aisle: conservative Republicans was opposed to such a massive entitlement expansion, regardless of the political benefits, and Democrats found reason to oppose the legislation because of the central role private managedcare firms would play in program implementation (Pear 2003). To further complicate matters, the aging-based interest groups were divided on the issue, with AARP famously supporting the legislation while most other groups opposed it. The legislation passed in 2003 and has greatly expanded drug coverage for elders, but, as both sets of critics warned, it has proven to be very expensive and has encouraged the expansion of so-called Medicare Advantage plans to attract a growing proportion of Medicare beneficiaries into the quasi-private market. The most contentious episode yet seen in aging politics took place in 2004–2005 as President George W. Bush made the partial privatization of Social Security the initial cornerstone of his second-term agenda. While an actual bill was never introduced, the president’s proposal would have diverted a portion of workers’ Social Security payroll tax payments into mandatory private retirement accounts akin to 401(k) defined contribution

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plans. The president argued that this approach offered greater choice and control for plan participants. The baby boomers figured centrally into the political calculations made by the White House. Boomers were seen by many Republicans and business executives as a new generation that had grown up comfortable with equities and other private investment vehicles (Weisberg 2005). In this way, they were seen as more of a ‘‘take-charge’’ generation than the so-called silent generation that had preceded them, and certainly more so than the yetearlier Depression generation, which had grown up leery of the stock market in light of their disastrous exposure to it. The boomers were to be key players in the president’s ‘‘ownership society’’ (Allen 2005). These generalizations were true of many well-off boomers, but they did not extend to many present-day older Americans nor to many younger family members—including many boomers—aware that lower Social Security benefits might affect them as well as their aging parents. The view that the Bush plan was more about undermining the existing system than creating new investment opportunities for future beneficiaries ultimately carried the day. After months of heated debate, it was clear by the end of 2005 that the president’s ideas had failed in the court of public opinion and within much of the ‘‘policy elite’’ community in Washington. The proposals were withdrawn without enabling legislation having ever been introduced in Congress. ACCOUNTING FOR THE GROWTH AND DEVELOPMENT OF OLD-AGE POLICY A clear result of these various twists and turns in aging policy development is that public programs and expenditures on behalf of the aged today represent an enormous investment by the federal government. Social Security and Medicare alone accounted for 30 percent of all federal spending in 2004. When another dozen or so small programs benefiting the aged are added to the list, this proportion increases to 37 percent. The question here becomes how these efforts became so substantial, again remembering that the United States trails most other industrialized nations in terms of the proportion of its overall economic output devoted to public social programs. We first look at the factors that help explain both the absolute and relative growth of programs for the old in the United States and then at an emergent set of factors that are now accounting for heightened levels of conflict around aging policy. These discussions set the stage for considering what policy landscape awaits the boomers in old age. The Political Appeal of Old Age in American Social Policy A number of factors account for the policy appeal of old age. The most prominent of these has been that advanced age has long been seen as a close

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proxy for demonstrated need. Until the very recent past and with very rare exceptions, to be old was to be poor, ill, frail, and dependent. Old age was a time of decline; indeed, it was the last of the many ‘‘bad things’’ that could happen to people in an industrial society (Rubinow 1934). Nor were older people to be blamed for this state of events; their situation, in Franklin Roosevelt’s words, ‘‘is not a result of a lack of thrift or energy . . . it is a mere byproduct of modern industrial life’’ (Rimlinger 1971, 212). The long-accepted inability of the old to work took on a special place in the American political culture where work and self-sufficiency are the hallmarks of the complete citizen. It is in this sense that American social policies have long been understood to be largely ‘‘residual,’’ that is, providing modest benefits to individuals when economic supports of the private market and/or social supports of the family have somehow failed those individuals. Only then would government intervene, and then presumably on a temporary and needs-tested basis. In short, most Americans were expected to find an economic home in the market and a social home in the family, and those who did not were routinely looked upon unfavorably. Because the old were no longer expected to succeed in the market and were known to often be without adequate family supports, they developed a relatively privileged place in the social policy arena. In the words of political scientists Anne Schneider and Helen Ingram (1993), the elderly have enjoyed ‘‘a positive political construction.’’ Put somewhat differently, seniors have possessed a high level of political legitimacy (Hudson 1978), with legitimacy’s key ingredient being a broad-based belief that one should receive government benefits. This was critical to their early policy success, because legitimacy obviated the need for power, which the aged did not then possess. Certainly, this legitimacy has been a central ingredient to their policy success, but that status had to be actualized for it to result in tangible programmatic enactments. That catalyst was added over the years by policy entrepreneurs and advocates seizing on the positive standing of the aged to try to extend social policies to other groups in the harsh American climate. Pleased to see the needs of older people addressed, these advocates also sought to use older people as something of ‘‘an ideological loss leader’’ (Hudson 1978), strategizing that bringing benefits to the old could be a critical first step in extending benefits to others, as well. Acting on the Appeal of Old Age: From Standing to Statutes The twin workings of the aged’s political standing and others’ desire to capitalize on it can be seen in three important legislative episodes. These are important both in how they help explain major policy expansions on behalf of older people and because they shed light on the difficulties of extending social welfare benefits more widely to the U.S. population.

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The Aged and the Birth of Social Insurance In the depths of the Depression, no group was more destitute than the old. Partly as a result, President Roosevelt designated Old Age Assistance (OAA) as Title I of the Social Security Act of 1935. OAA was a classic residual program, and it drew no opposition other than from those opposing any federal government social policy activity at all (Gordon 1994). Roosevelt and his advisors were also hoping that the popularity of Title I would extend to the much more controversial Title II: Old Age Insurance (OAI), the cornerstone of today’s Social Security program. While centered on the old, OAI was a policy of a far different stripe than OAA. Old Age Insurance was not a residual program; it was to be an institutional one, that is, permanent, ongoing, routinized, and funded by a new tax dedicated solely to it. OAA was about responding to temporary need; OAI was about protecting against permanent risks, in this case the undisputed likelihood that old age would result in loss of income. In his ‘‘fireside chats’’ selling this seemingly revolutionary policy model to the American public, Roosevelt emphasized that it simply acknowledged the support required when one could no longer work. Initially, Title II was limited to retirees themselves; it would be another few years before it was extended, with some controversy, to the dependents of retired and deceased workers, that is, people who were in need and were related to a worker but who themselves had not worked. Nonetheless, this redubbed OASI (Old Age and Survivors Insurance) program struggled to gain legitimacy vis-a-vis OAA until the early-1950s, when its gradual expansion gave it firm and, soon thereafter, dominant footing (Skocpol and Ikenberry 1987). Medicare as a Step toward National Health Insurance The second major policy episode featuring the aged centers on Medicare. Presidents Roosevelt and Truman had each hoped to develop a national health program that would cover a broad range of Americans. Roosevelt never submitted such a plan to Congress, having more than enough controversy swirling around what he was already attempting. Truman attempted repeatedly to move a bill forward in the late 1940s, but Republicans using Communist-scare tactics and Southern Democrats using racist tactics doomed these efforts to defeat (Quadagno 2005). In the wake of Truman’s failure, health care advocates in Washington sought a new strategy to try to bring life back to the health insurance idea. By the late 1950s, they had settled on the one group about whom ‘‘one could not say that members should have taken care of their financial-medical problems by earning or saving more money’’ (Marmor 1970, 17). For the better part of a decade, these advocates pushed for a hospital-based insurance proposal directed to older persons. In 1965, in the wake of President Kennedy’s assassination and President Johnson’s landslide victory in the 1964 election, Medicare for the old (and later, the disabled) became law.

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Once again, the singular legitimacy of the old carried the day. And, again, it stands as a uniquely American way of doing social policy business: No other country in the world targeted the elderly alone in enacting national health programs; certainly, older people were included, but it was current workers more than the old that tended to be the center of attention. Supplemental Security Income: From Single Mothers to the Poor Elderly A third and final episode featuring the elderly’s favorable political standing originated, oddly enough, from a proposal to radically reform the Aid to Families with Dependent Children program (AFDC, aka ‘‘welfare’’) supporting low-income single mothers. In 1970, President Richard Nixon proposed a Family Assistance Program (FAP) to Congress in which a range of social services enacted during the 1960s would be eliminated and the existing cash grant would be standardized across the country, representing a very modest guaranteed income for these women and their children (Moynihan 1973). The idea of a guaranteed income was essentially unheard-of in American social policy circles, and its sponsorship by Nixon made it seem more unlikely yet. After much discussion and passage by the House of Representatives, FAP finally went down to defeat in the Senate Finance Committee. Republicans and Southern Democrats could not abide the idea of an income guarantee, and liberal Democrats found the guarantee amount—$1,600 per year—woefully inadequate. In the wake of this defeat, advocates and analysts once again tried to see if anything could be salvaged from all the time and effort that had been devoted to the proposal. Realizing that AFDC was a highly controversial program—being about work and often illegitimacy and desertion—it occurred to these reformers that focusing instead on the ‘‘adult categories’’ programs might prove a safer bet. Thus, it was proposed that the administration and financing of the Old Age Assistance, Aid to the Blind, and Aid to the Totally and Permanently Disabled programs be nationalized and contain a national income guarantee regardless of where recipients lived. Seen as a needed supplement to these individuals’ Social Security benefits, the Supplemental Security Income program was enacted quickly and without great fanfare in the wake of the FAP failure (Burke and Burke 1974). Here, again focusing on older people helped snatch victory from the jaws of defeat. The Growing Presence of Seniors in American Life These legislative episodes, now dating back thirty years or more, took place when older people were both demographically and sociologically a relatively minor segment of the U.S. population. Their lack of recognition was captured by a feature in the U.S. Senate Committee on Aging’s annual publication Developments in Aging, which was labeled ‘‘Every Eleventh American’’

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in the 1960s editions and ‘‘Every Tenth American’’ in the early 1970s (Senate Committee on Aging 1972), hoping to highlight the growing presence of older people in the American population. By some time in the late 1970s, the point was made, and the ensuing years have seen growing awareness and, more recently, even alarm at the rising presence of the old in American life. Demographically, seniors now account for 12 percent of the population, a figure which is expected to rise to 20 percent by 2030 as the boomers complete their entry into old age. Sociologically, old age has become ‘‘a distinct phase of life’’ (Kohli 1988) or, in Peter Laslett’s (1987, 134) words, has emerged as ‘‘a third age’’ which by the 1980s ‘‘had became a settled feature of the industrial nations.’’ Economically, the aged are no longer almost universally poor. Due largely to the growth of Social Security, between 1960 and 2004, poverty among the elderly decreased from just under 40 percent to a fraction over 10 percent. From 1967 to 1992, the median income of those aged 65 and above (in 1992 dollars) rose from $8,940 to $15,143, or 69 percent, compared to an increase of only 26 percent among those 64 and younger, from $16,994 to $21,330 (Radner 1996). By the late twentieth century, the most notable culmination of these trends was the emergence of retirement as a distinctive and institutionalized stage of life (Atchley 1982). Largely unknown early in the last century, by its end, retirement had become an established expectation of most workers. Between 1950 and 1990, the percentage of men aged 65 and above in the labor force fell from 45.8 percent to 16.3 percent (Purcell 2000). Once a dreaded event—being given a gold watch and ushered out the door—retirement came to be eagerly anticipated by most workers a few decades later. As noted by labor organizer Jerry Flint: There used to be a stigma to going out. He was over the hill. But now it’s a looked-for status. Those retirement parties, they used to be sad affairs. They are darn happy affairs now. The peer pressure is for early retirement. (Schulz 1984, 84)

Recently, however, a notable countertrend has emerged, requiring nothing less than ‘‘reconsidering retirement’’ (Morris and Bass 1988). Most notably, labor force participation rates among older men appear to have at least partially reversed, rising from 1990’s 16.3 percent to an estimated 17.8 percent in 2008. Pressures on retirement are coming from a number of directions: older workers facing the prospect of inadequate retirement incomes (Munnell, Sass, and Aubry 2006); employers contemplating possible labor shortages given the low growth rates of young and middle-aged populations (and actually negative for those aged 35 to 44) (Dychtwald, Erickson, and Morison 2004); and the government worried about escalating public pension and health care costs (Walker 2007).

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Importantly, these pressures are coming to a head just as the boomers attain old age. Their road to retirement will be noticeably different than that of their parents, and it stands as one of the major challenges that the boomers and society will face in the decades ahead. The New Political Standing of Older Americans Not surprisingly, the growing social and economic presence of the elderly now extends to the world of politics and policy. Once a relatively small, needy, and residual population, older people have now come to command a very prominent position in American public life. Their heightened role in politics is seen most directly through increasing levels of political participation. Their place in policy is seen through growing expenditures under public income and health care programs, notably Social Security and Medicare. Indeed, an almost synergistic interplay between political participation and policy outcomes has been shown by recent scholarship to centrally account for the dramatic increase in seniors’ new political standing. On the political side of this equation, the most notable indicator of new senior involvement is found through their voting behavior. Looking at the percentages of different age groups voting from 1964 to 2004 (see table 7-1), seniors emerge as the only voting age population group whose rate of electoral participation has actually increased. Senior participation has slightly risen over this period, while it has notably decreased for all three younger groups, especially among those aged 18–44. As a result of these countertrends, seniors today have higher voting rates than all other age

TABLE 7-1. Percentage of Voting Age Persons, by Age Group, Who Voted in Presidential Elections, 1964–2004 Age Group Year

18–24

25–44

45–64

65+

1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004

51 50 50 42 40 41 36 43 32 32 42

69 67 63 59 59 58 54 58 49 50 52

76 75 71 69 69 70 68 70 64 64 67

66 66 64 62 65 68 69 70 68 67 69

Source: U.S. Census Bureau, Current Population Survey, November 2004 and earlier reports.

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groups, whereas in 1964, they exceeded only the youngest group. The lament most usually drawn from data such as these follows from their strong suggestion that Americans are becoming increasingly disconnected and even alienated from politics. Certainly, the drop in the voting percentage of the two younger groups, by 18 percent and 25 percent, respectively, is certainly a cause for alarm. For purposes here, however, the critical finding is that, being the only age group whose participation is increasing, seniors are finding reasons to participate while others are not. There are additional measures documenting seniors’ new interest in politics. As carefully documented by Campbell (2003), other forms of political participation—being informed, letter-writing, campaigning, contributing—also show absolute and relative increases among senior citizens over the past half-century. The establishment of retirement as a defined role, increasing economic well-being, and more leisure time have each given seniors a heightened political identity that has been translated into political behaviors such as these. The role of older people in politics has also expanded through interest group representation, a relatively recent phenomenon. With the fleeting exception of the Townsend Movement (Holtzman 1963; Amenta 2006) of the Depression years, older people had no organized political presence until the 1960s. Indeed, Henry Pratt (1976) refers to the period from the early 1940s to the mid-1950s as the ‘‘dismal years’’ for senior political organizations. The most well-known of the groups—the American Association of Retired Persons (renamed AARP in the mid-1990s to formalize its interest in issues beyond ‘‘retirement’’)—was formed in 1958. It, in turn, was an outgrowth of a predecessor organization (the National Retired Teachers Association), which had been formed as an organizational consequence of a life insurance company identifying and selling policies to retired teachers beginning in the late 1940s. A second mass-membership organization—the National Council of Senior Citizens (NCSC)—emerged from the ‘‘Senior Citizens for Kennedy’’ movement formed around the 1960 presidential election; NCSC continued to lobby for Medicare’s enactment after the election and then to lobby on behalf of issues of concern to retired blue-collar workers. In this expansive period, circa 1960–1975, numerous other groups appeared, most of them made up of largely nonelderly professionals working on behalf of older people (and, critics argued, themselves), including service providers, advocates, academic researchers, and public officials running public programs directed at seniors (Binstock 1972). In the ensuing years, the number of such groups continued to grow. Their new presence was formalized through the creation of the Leadership Council of Aging Organization (LCAO), an organization itself made up of other aging-related organizations. As if further evidence were needed, LCAO’s creation symbolized that older people had arrived in Washington in a big way. As detailed in table 7-2, LCAO now counts 54 organizations as its members. There is debate

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TABLE 7-2.

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Members of the Leadership Council of Aging Organizations

•AARP •AFL-CIO Department of Public Policy (AFL-CIO) •AFSCME Retiree Program (AFSCME) •Alliance for Aging Research (AAR) •Alliance for Retired Americans •Alzheimer’s Association •American Association for International Aging (AAIA) •American Association of Homes and Services for the Aging (AAHSA) •American Federation of Teachers Program on Retirement & Retirees (AFT) •American Foundation for the Blind •American Geriatrics Society (AGS) •American Postal Workers Union Retirees •American Public Health Association •American Society of Consultant Pharmacists (ASCP) •American Society on Aging (ASA) •Asociacion Nacional pro Personas Mayores (ANPPM) (National Association For Hispanic Elderly) •Association for Gerontology and Human Development in Historically Black Colleges and Universities (AGHDHBCU) •Association of Jewish Aging Services (AJAS) •B’nai B’rith International •Catholic Health Association of the United States (CHA)

•National Adult Day Services Association (NADSA) •National Asian Pacific Center on Aging (NAPCA) •National Association for Home Care (NAHC) •National Association of Area Agencies on Aging (N4A) •National Association of Foster Grandparent Program Directors (NAFGPD) •National Association of Nutrition and Aging Services Programs (NANASP) •National Association of Professional Geriatric Care Managers (NAPGCM) •National Association of Retired and Senior Volunteer Program Directors, Inc. (NARSVPD) •National Active and Retired Federal Employees Association (NARFE) •National Senior Corps Association •National Association of Social Workers (NASW) •National Association of State Long Term Care Ombudsman Programs (NASOP) •National Association of State Units on Aging (NASUA) •National Caucus and Center on Black Aged, Inc. (NCBA) •National Committee to Preserve Social Security and Medicare (NCPSSM) •National Citizens Coalition on Nursing Home Reform •National Council on the Aging, Inc. (NCOA)

•National Hispanic Council on Aging (NHCOA) •National Indian Council on Aging, Inc. (NICOA) •National Osteoporosis Foundation (NOF) (Continued)

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•Eldercare America, Inc. •Experience Works, Inc. •Families USA •The Gerontological Society of America (GSA) •Gray Panthers •International Union, United Auto Workers •Meals On Wheels Association Of America (MOWAA) •Military Officers Association of America (MOAA) •National Academy of Elder Law Attorneys (NAELA)

•National Senior Citizens Law Center (NSCLC) •Older Women’s League (OWL) •Service Employees International Union Retired Members Program (SEIU) •United Jewish Communities •Volunteers of America

Source: Leadership Council of Aging Organizations, http://www.lcao.org/membership.htm.

among observers about how effectively LCAO and these groups actually represent the elderly in Washington, but doing so is clearly their formal intent: LCAO is ‘‘concerned with the well-being of America’s older population and is committed to representing their interests in the policy-making arena’’ (LCAO 2006). The mass membership groups can most clearly make that claim, but a literature on the ‘‘professionalization’’ of citizen representation in the form of paid staffs and a growing bureaucracy argues that even these claims may be suspect (Skocpol 1996). The activities of the provider groups tend to be focused more directly on legislation directly affecting that provision. The New Policy Standing of Older Americans These aging-related demographic, social, economic, and political trends have been accompanied by major policy developments. Since the 1970s, this has been seen less in new authorizations (i.e., new legislation on behalf of the old) than in greatly expanded appropriations under existing authorizations. The only new major legislation enacted since the late 1970s has been the Medicare Part D prescription drug program passed in 2003. Modest expansions have taken place under the Older Americans Act, new financing and delivery provisions have been added to Medicare, and potentially expansionary waivers have been introduced under Medicaid, but nothing approximating the floodgate of new legislation of the 1965–1974 period has been seen since. Expenditures on behalf of seniors have been an entirely different story. Because the three largest programs affecting the old (and three of the largest

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items in the entire federal budget)—Social Security, Medicare, and Medicaid—are ‘‘entitlement programs,’’ the government is required to provide benefits to all individuals meeting eligibility requirements. Put differently, the money must be made available independent of the annual appropriations process associated with most other programs (Weaver 1988). Because the older population is growing, because Old Age and Survivors benefits under Social Security are indexed to current wages and adjusted for future cost-ofliving increases, and because medical inflation and technology are driving health care costs higher (including those under Medicare and Medicaid), federal expenditures on behalf of the old are rising rapidly. Table 7-3 makes clear both the sizable nature of these expenditures and the degree to which they are increasing over time. The Critical Relationship between Aging Policy and Politics Beyond noting the dramatic rise in the standing of the old in the world of politics, it is important to say a word about how this has come about or, more exactly, what is driving what. This is not just of interest for academic purposes; rather, it is important because it says a great deal about the public-sector prospects of the baby-boom generation. As we will note in the chapter’s concluding section, the boomers are about to face a political arena that will be both more inclusive and more contentious than any that older people have faced to this point. The respective roles of aging-related policies and politics will say much about how these future events play out. It has long been conventional wisdom that the rise of aging-based policy was the result of large numbers of increasingly well-organized older people voting, organizing, and lobbying for such benefits. This understanding was found in both scholarly (Pratt 1976; Price 1997) and popular treatments (Thurow 1996; Peterson, 1999). While there can be no question of the aged’s growing presence in politics, the question remains as to whether our major public policies on aging in fact owe their existence to this newfound presence. Recent scholarship suggests that this is probably not the case. Indeed, the causal connection may be the other way around: it is the policies themselves that have helped create the political identity and organization that older people unquestionably enjoy today. A simple chronology hints at this possibility when one notes that significant policy enactments and expansions appear to have preceded rather than followed group developments. Thus, AARP had virtually no political presence until the 1970s, and one of its first political statements was to oppose as inflationary a 1972 Democratic proposal to raise Social Security benefits by 20 percent (Pratt 1976). In his now-classic treatment ‘‘The Origins and Maintenance of Interest Groups in America,’’ political scientist Jack Walker (1983) highlighted the interplay of aging-related groups and policies, noting that more than half of

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TABLE 7-3. Estimated Federal Spending for the Elderly under Selected Programs, 1971–2010 (by fiscal year, in billions of dollars) 1971 Social Security Federal Civilian Retirement Military Retirement Annuitants’ Health Benefits Benefits for Coal Miners/ Black Lung Supplemental Security Income Veterans’ Compensation & Pensions Medicare Medicaid Food Stamps Total Housing Veterans’ Medical Care Administration on Aging Programs Low Income Energy Assistance Total Federal Total, all federal spending As a % of the Budget As a % of GDP Per elderly person (in 2000 $)

1980

1990

Mandatory Programs 29 85 196 2 8 21

2000

Projected 2010

307 33

471 50

1 *

2 1

7 2

14 4

21 9

*

1

1

1

1

1

2

4

6

10

1

7

4

9

14

8 2 * 44

29 5 1 137

96 14 1 349

189 33 1 597

377 77 1 1,026

Discretionary Programs * 2 4 1 3 6 * 1 1

7 9 1

10 13 1

n.a.

*

*

*

1

1

6

11

17

24

Spending on People 65 and Over 46 144 360 615 21.7 24.3 28.7 34.8 4.2 5.3 6.3 6.4 8,896 11,839 15,192 17,688

1,050 42.8 7.1 21,122

* = less than $500 million; n.a. = not applicable Source: Congressional Budget Office (2002).

the 43 aging interest groups in his study came into existence after 1965, the touchstone year that saw the enactment of Medicare, Medicaid, and the Older Americans Act. In Walker’s words: In all of these cases, the formation of new groups was one of the consequences of major new legislation, not one of the causes of its passage. A pressure model of the policymaking process in which an essentially passive legislature

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responds to petitions from groups of citizens who have spontaneously organized because of common social or economic concerns must yield to a model in which influences for change come as much from inside the government as from beyond its institutional boundaries. (403)

Being entirely about service provision rather than direct benefits to seniors, the Older Americans Act provides a concrete example of this process. The state agencies charged with administering the program formalized their trade association, the National Association of State Units on Aging, in the years after 1965, and the sub-state agencies brought into existence through amendments in 1972 created their trade association, the National Association of Area Agencies on Aging, in the wake of that authorization. Groups of nutrition, transportation, and legal-service providers were also formed subsequent to the legislative events. Yet more compelling evidence of the policy-to-politics chain is seen in the realization of seniors themselves as a self-identified political constituency. In her pathbreaking book How Policies Make Citizens: Senior Political Activism and the American Welfare State, Andrea Campbell (2003) documents how the now imposing political presence of older people owes much of its existence to the expansion of Social Security. In carefully crafted research juxtaposing public opinion and voting data with Social Security program expansion, Campbell shows how levels of political consciousness, participation, and salience followed in the wake of Social Security’s growth. She goes on to argue that the program, in dramatically improving the economic wellbeing of older people, created both time and interest for seniors to involve themselves in political matters more heavily than had ever been the case. Senior mass membership groups did not create Social Security policy. Rather, the policy helped create the groups. Social Security’s effects on individual—the increases in income, free time due to retirement, and political interest—enhance the likelihood of group membership. Social Security created a constituency for interest group entrepreneurs to organize, just as it defined a group for political parties to mobilize. (77)

While the causal role of policy is the principal contribution of this analysis, the secondary effects of policy’s role are equally important. Thus, at ‘‘Time 1,’’ public policy may have been critical in the creation and institutionalization of the organized aging, but at ‘‘Time 2,’’ the groups became critical in efforts to expand or—more recently—to defend the policies against outside encroachment. Put differently, the Walker/Campbell argument does not dismiss the role of interest groups; rather, it helps explain both their origins and the dynamic—namely, benefit protection—that keeps formal members or informal adherents tuned in to their messages. In short, ‘‘AARP may be the biggest lobby in Washington,’’ but AARP would not be where it is if (1) Social Security had not helped galvanize the elderly and (2) Social

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Security and other programs were not there as a policy fulcrum around which AARP could rally the membership. AGING BOOMERS AND PUBLIC POLICY The baby boomers entering old age in 2011 are facing a far different policy world than did their grandparents and parents. For the thirty-year period following the passage of Social Security, the aged were a marginal population being served by extremely modest programs. For those entering old age about the time of Medicare’s enactment in 1965, new programs and program benefits were to bring with them levels of well-being and opportunity unequaled by any previous older generation. For the boomers about to enter old age, there is good news and bad news: the benefits are still there, but a host of pressures will be brought to bear on their future size and direction. The list of factors behind these pressures is well known (and reviewed in detail elsewhere in these volumes). The growth in aging-related expenditures for retirement income and especially health care programs will surely be reined in from what current policy would otherwise allow. Pressures for older boomers to remain in the labor force are certain to build as they contemplate retirement in the face of smaller succeeding generations being potentially unable to meet the demand for workers, skilled and unskilled alike. Finally, the improved well-being of the older boomer generation— brought about in part by the very programs being brought under pressure— will lead to questions of relative need and equity in the face of growing cost and competing budgetary pressures. These costs and pressures might focus on ‘‘young versus old’’ or perhaps on the ‘‘well-off versus the less well-off,’’ or even on ‘‘younger, less well-off populations of color versus relatively welloff non-Hispanic whites.’’ These are some of the potential political fault lines older boomers could confront. Yet, the evidence presents a far from certain picture that major fissures will open along age and generational lines. The ‘‘politics’’ evidence, as reviewed in the next two chapters by Robert Binstock, John Williamson, and Diane Watts-Roy, does not point to sharp intergenerational (or inter-ethnic) polarization, although efforts to frame issues in those terms are certain to persist. In the face of the various pressures that are building, it is important to note that there is no sociological or anthropological literature suggesting deep-seated animosity among older and younger people (Bengtson, Marti, and Roberts 1991). Moreover, myriad surveys centered on the enormous Social Security program find, if anything, that younger people are more supportive of the program than are older ones, with over 90 percent of all age groups favoring the program’s maintenance at either current or expanded levels (Cook 2002). More likely will be policy initiatives centered on ‘‘deconstructing’’ the older population, acknowledging increasing levels of intragenerational diversity in

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well-being among older boomers. This could lead to more means-testing or, for the well-off, ‘‘affluence-testing’’ being introduced into the major entitlement programs. Such means-testing might not only be confined to questions of income. So-called functional means-testing has been selectively introduced into health and social service programs, signifying that one must be frail as well as poor (and perhaps without a relative or other ‘‘informal’’ caregiver to lend assistance) in order to receive public benefits. Another widely discussed idea among those wishing to curtail age-related benefits on both political and administrative grounds is raising the age of eligibility for various age-based programs. Raising the normal retirement age for Old Age Insurance benefits not only is an administratively efficient way of cutting future benefits but also reasserts (a now higher) advanced age as a reasonably proxy for being in need of social protection. Public pension policy has always been central to defining old age (Otto von Bismarck was the first to ‘‘create’’ the threshold of old age as 65 in German legislation in the late 1880s). It is nonetheless a matter of great controversy whether we wish to essentially ‘‘re-residualize’’ old age by postponing the retirement age in light of strides that have been made in recent decades to improve the wellbeing of the ‘‘current’’ older population, that is, those aged 65 and above (Hudson 1999). With the age for full benefits already scheduled to rise to 66 in 2009, a step in this direction has already been taken. Nor will pressures to raise eligibility levels derive from cost-cutting concerns alone. The very considerable growth of the ‘‘old-old’’ population of boomers beginning around 2020 will mean added long-term care expenditures, an area where the federal government’s response long has been seen as inadequate when compared to acute health care expenditures under Medicare, a program designed for a notably different older population than the one rising now (see chapter 12 in this volume). Chronic illnesses of the very old constitute the looming health care crisis facing the long-lived boomers. A report commissioned by the Alzheimer’s Association (2008), finds that Medicare spent $91 billion on people with Alzheimer’s and other dementias in 2005, and that number is expected to climb to $160 billion by 2010 and $189 billion by 2015. In the face of these pressures, the remaining question is how the boomers will respond. Ideologically, the boomers are somewhat to the right of the Depression-era generation that preceded them, but probably not to such a degree that their ‘‘interest-specific’’ concerns around Social Security and Medicare would lead them to abandon their vested interest in such programs. Yet, many boomers themselves realize that they are better off and have the potential to make greater societal contributions than did predecessor generations. Whether it be through extended work years, voluntarism, civic engagement, or family caregiving, there is some reason to believe that the ratio of boomers’ ‘‘contributions’’ to their ‘‘drawdowns’’ will be higher than those who came before. Indeed, the literature on intergenerational

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transfers finds considerably more movement of resources from the old to the middle-aged and young than the reverse. Nonetheless, it is hard to argue that private and informal transfers from old to young will politically offset public and formal ones from young to old. Ultimately, in the words of Williamson and Watts-Roy, it will make an enormous difference whether these inevitable tensions get played out using an ‘‘intergenerational equity’’ frame or an ‘‘intergenerational reciprocity’’ one. It is conceivable but unlikely that the fiscal pressures may prove to be such that most observers, including the boomers, will agree that reforms must be made. European experience suggests that this can be done, though not without considerable controversy. Because age is a less salient feature of both politics and policy in the European nations and because their decisionmaking structures have historically been more centralized than those in the United States, it is far from certain that the U.S. system could pull off inclusive and redistributive allocations around these issues. It is also the case that the U.S. demographic profile is more ‘‘favorable,’’ in that higher fertility rates and patterns of immigration mean that the country will continue to have relatively fewer older people than is the case in Europe. It thus seems that, in policy terms, we may limp along, broadly understanding that something must be done. Absent a real (or manufactured) crisis atmosphere, it seems likely that the contending forces will be at loggerheads, and such stalemate may well put off the day of reckoning. For old-age income supports and Social Security, this would not be the worst of all outcomes. A reasonable case can be made that older people will work and contribute longer, and adjustments can be made in the program to maintain its viability well into the future. However, health care costs and Medicare/Medicaid are a different story. But here the issue is less about aging and older people than it is about medical inflation and technological/pharmaceutical innovation. Meeting this health care challenge will be extraordinarily difficult, but it is not principally about the boomers and should not be cast in that light. REFERENCES Allen, M. 2005. Congressional Republicans agree to launch Social Security campaign. Washington Post. January 31. Alzheimer’s Association. 2008. 2008 Alzheimer’s disease facts and figures. Chicago: Alzheimer’s Association. Amenta, E. 2006. When movements matter: The Townsend movement and the rise of Social Security. Princeton, NJ: Princeton University Press. Atchley, R. 1982. Retirement as a social institution. Review of Sociology 8:263–87. Bengtson, V., G. Marti, and R. E. L. Roberts. 1989. Age-group relationships: Generational equity and inequity. In Parent–child relationships throughout life, ed. K. Pillemer and K. McCartney, 253–78. London: Routledge.

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Binstock, R. H. 1972. Interest-group liberalism and the politics of aging. Gerontologist 12:265–80. Burke, V. J., and V. Burke. 1974. Nixon’s good deed: Welfare reform. New York: Columbia University Press. Campbell, A. L. 2003. How policies make citizens: Senior political activism and the American welfare state. Princeton, NJ: Princeton University Press. Center for Medicare and Medicaid Services. 2007. National health expenditures. Washington, DC: Office of the Actuary, Center for Medicare and Medicaid Services. Cook, F. L., with L. Jacobs. 2002. Assessing assumptions about Americans’ attitudes about Social Security: Popular claims meet hard data. In The future of social insurance, ed. P. Edelman and D. L. Salisbury, 82–110. Washington, DC: Brookings Institution Press. Dychtwald, K., T. Erickson, and B. Morison. 2004. It’s time to retire retirement. Public Policy & Aging Report 14 (3): 1, 23–27. Federal Interagency Forum on Aging-Related Statistics. 2007. Older Americans update, 2006: Key indicators of well-being. Washington, DC: U.S. Administration on Aging. Available at http://agingstats.gov/agingstatsdotnet/Main_Site/Data/ 2006_Documents/slides/OA_2006.ppt. Gordon, L. 1994. Pitied but not entitled: Single mothers and the history of welfare. Cambridge, MA: Harvard University Press. Greenspan Commission. 1983. Report of the National Commission on Social Security Reform. Available at http://www.ssa.gov/history/reports/gspan.html. Himelfarb, R. 1995. Catastrophic politics: The rise and fall of the Medicare Catastrophic Care Coverage Act of 1988. University Park: Pennsylvania State University Press. Holtzman, A. 1963. The Townsend Movement: A political study. New York: Bookman Associates. Hudson, R. B. 1978. The graying of the federal budget and its consequences for oldage policy. Gerontologist 18:428–40. ———. 1999. Conflict in today’s aging policy: New population encounters old ideology. Social Service Review 73 (3): 358–79. Katz, M. 1996. In the shadow of the poorhouse. New York: Basic Books. Kohli, M. 1988. Ageing as a challenge for sociological theory. Ageing and Society 8:367–94. Laslett, P. 1987. The emergence of ‘‘the third age.’’ Ageing and Society 7:133–66. LCAO (Leadership Council of Aging Organization). 2006. Our mission. http:// www.lcao.org/our_mission.htm. Lipset, S. M. 1996. American exceptionalism: A double-edged sword. New York: W. W. Norton. Marmor, T. 1970. The politics of Medicare. Chicago: Aldine. Morris, R., and S. Bass. 1988. Retirement Reconsidered. New York: Springer. Moynihan, D. P. 1973. The politics of a guaranteed income: The Nixon administration and the Family Assistance Plan. New York: Vintage. Munnell, A., S. A. Sass, and J. P. Aubry. 2006. Employer survey: 1 of 4 boomers won’t retire because they can’t. Issue Brief, Series 6. Chestnut Hill, MA: Center for Retirement Research. Myles, J., and J. Quadagno. 2002. Political theories of the welfare state. Social Service Review 75 (1): 34–58.

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Orloff, A. S. 1988. The political origins of America’s belated welfare state. In The politics of social policy in the United States, ed. M. Weir, A. S. Orloff, and T. Skocpol. Princeton, NJ: Princeton University Press. Pear, R. 2003. Medicare plan covering drugs backed by AARP. New York Times. November 18. Peterson, P. G. 1999. Gray dawn: How the coming age wave will transform America —and the world. New York: Times Books. Pierson, P. 1995. Dismantling the welfare state? Reagan, Thatcher, and the politics of retrenchment. New York: Cambridge University Press. Pratt, H. 1976. The gray lobby. Chicago: University of Chicago Press. Price, M. C. 1997. Justice between generations: The growing power of the elderly in America. Westport, CT: Greenwood Press. Purcell, P. 2000. Older workers: Employment and retirement trends. Monthly Labor Review (10): 19–30. Quadagno, J. 2005. One nation, uninsured. New York: Oxford University Press. Radner, D. 1996. Incomes of the elderly and non-elderly. Social Security Bulletin 58:82–97. Rimlinger, G. 1971. Welfare policy and industrialization in Europe, America, and Russia. New York: John Wiley. Rubinow, I. 1934. The quest for security. New York: Henry Holt. Schneider, A., and H. Ingram. 1993. Social construction of target populations. American Political Science Review 87 (2): 334–47. Schulz, J. S. 1984. The Economics of Aging. 4th ed. New York: Auburn House. Senate Committee on Aging. 1972. Developments in Aging, 1972. Report 93-147. Washington, DC: GPO. Skocpol, T. 1993. Protecting soldiers and mothers. Cambridge, MA: Belknap Press of Harvard University Press. ———. 1996. Advocates without members: The recent transformation of American civic life. In Civic engagement in American democracy, ed. T. Skocpol and M. Fiorina. Washington, DC: Brookings Institution Press, 461–509. Skocpol, T., and J. Ikenberry. 1987. Expanding social benefits: The role of Social Security. Political Science Quarterly 102 (3): 389–417. Smith, D. 2002. Entitlement politics: Medicare and Medicaid, 1995–2001. New York: Aldine de Gruyter. Thurow, L. C. 1996. The birth of a revolutionary class. New York Times Magazine, May 19, 46–47. Upp, M. 1982. A look at the economic status of the aged then and now. Social Security Bulletin 45:16–20. Walker, D. 2007. Testimony before Senate Budget Committee by the Comptroller General of the United States. January 11. Walker, J. 1983. The origins and maintenance of interest groups in America. American Political Science Review 77:390–406. Weaver, J. 1988. Automatic government: The politics of indexation. Washington, DC: Brookings Institution. Weisberg, J. 2005. Bush’s first defeat: The President has lost on Social Security. Slate, March 31, http://www.slate.com/id/2115141/. Wilensky, H., and C. Lebeaux. 1958. Industrial society and social welfare. New York: Free Press.

8

The Boomers in Politics: Impact and Consequences ROBERT H. BINSTOCK*

M

ore than three decades ago (in 1974), the prestigious American Association for the Advancement of Science (AAAS) sponsored a symposium entitled ‘‘The 1990s and Beyond: A Gerontocracy?’’ It raised and seriously addressed the question of whether the United States would become a country dominated and ruled by elders. Although many members of Congress and other political leaders are of advanced age, they were not the focus of the AAAS discussion. Rather, the symposium focused on the political consequences of population aging and presented different views regarding the likely effects of demographic change on the outcome of national elections. The general answer from the panelists was that an America with a much larger population of elders would see only a modest change in American politics in the twenty-first century. But in recent years, a number of prominent opinion makers believe that older people will soon play a much stronger role in politics than in the past because of the 76 million baby boomers now beginning to join the ranks of old age and becoming eligible for Social Security and Medicare. Some of these opinion makers envision such a powerful role for the boomers in politics that they have virtually become prophets of doom. Among them is Peter *Some portions of this chapter are adapted from Aging Nation: The Economics and Politics of Growing Older in America, by James H. Schulz and Robert H. Binstock, copyright 2006, with the permission of Greenwood Publishing Group, Inc., Westport, CT.

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G. Peterson, a Wall Street financier and former secretary of commerce. For years, he has argued that government obligations under these old-age entitlement programs must be drastically reduced and has warned that the political power of boomers may make these reforms difficult, if not impossible: Will global aging enthrone organized elders as an invincible political titan? . . . Picture retiring boomers, with inflated economic expectations and inadequate nest eggs, voting down school budgets, cannibalizing the nation’s infrastructure, and demanding ever-steeper hikes in payroll taxes. (1999, 209)

Peterson is so concerned about the impact of boomers on politics that he has established a foundation, to be funded by a billion dollars of his personal assets, to carry forward his message. According to a report in the New York Times, one of his specific objectives ‘‘is organizing a youthful equivalent to the powerful lobby group for seniors, AARP’’ (Thomas 2008, C4). Similarly, MIT economist Lester Thurow has depicted aging boomers as a dominant bloc of voters whose self-interested pursuit of government benefits will pose a fundamental threat to our democracy: No one knows how the growth of entitlements can be held in check in democratic societies.. . . Will democratic governments be able to cut benefits when the elderly are approaching a voting majority? Universal suffrage . . . is going to meet the ultimate test in the elderly. If democratic governments cannot cut benefits that go to a majority of their voters, then they have no long-term future.. . . In the years ahead, class warfare is apt to be redefined as the young against the old, rather than the poor against the rich. (1996, 47)

Are Peterson and Thurow—and the many pundits, think tank analysts, journalists, and public academicians who share their perspective—correct in their view that elderly boomers will dominate American politics as they strive to maintain and enhance their old-age benefits? Will boomers band together with other elders to engage in generational conflict over taxes and spending? Or will the politics of aging be much as is it is today? A good place to start in answering these questions is by considering what we know about participation in politics by cohorts of older persons in recent decades. Then we can consider whether and how the broader arena of politics may change in the years ahead, perhaps leading older boomers to behave politically in a fashion different from their predecessor cohorts. POLITICAL PARTICIPATION BY OLDER PERSONS There is little doubt that older Americans are highly engaged in political participation today. They vote, contribute to and work in political campaigns, contact public officials, serve on local public advisory boards and councils on aging, and participate in political processes created especially for them such as White House Conferences on Aging and, at the state level, ‘‘Silver-Haired

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Legislatures.’’ In addition, millions of them belong to mass membership organizations that engage in political activity. As MIT political scientist Andrea Campbell (2003, 65) has observed, older persons ‘‘are indeed senior citizens, fully incorporated into social and political citizenship.’’ Voting Voting is the type of political activity by older persons that is most amenable to nationwide, ongoing documentation (through U.S. Census data and election exit polls). It is also the arena of activity that is most widely publicized. As elections approach, especially presidential elections, journalists, pollsters, and campaign strategists mobilize a perennial cliche: Senior voters are a key battleground in this election. One reason for this cliche is that older persons are a readily identifiable program constituency that has been created by old-age public policies such as Social Security and Medicare. Therefore, seniors are a tempting campaign target, particularly because they are potentially ‘‘swing voters,’’ not committed heavily as a bloc to either Democrats or Republicans. A second reason why older people are viewed as an important electoral target is that they turn out to vote at a higher rate than do members of other age groups. As table 8-1 shows, in the past seven U.S. presidential elections individuals aged 65 and older voted at a substantially higher rate than those in the 18–24 and 25–44 age groups, and (except in 1980 and 1984) as high as or higher than the 45–64 age group. The same general pattern of age group turnouts has occurred in the last seven midterm elections. As a consequence of their comparatively high voting rate, older Americans have typically constituted a larger share of those who actually vote than they are of the voting-age population. For instance, in the 2004 presidential election, voters aged 65 and older cast 19 percent of the votes, even though they were only 16 percent of the voting-age population (U.S. Census Bureau 2005). Reasons for High Participation Rates Why do older persons vote at a higher rate than younger persons? This is a difficult question to answer, because the various age brackets for which TABLE 8-1. Percentage of Voting-Age Persons Who Voted in U.S. Presidential Elections, by Age Groups, 1980–2004 Age Group

1980

1984

1988

1992

1996

2000

2004

18–24 25–44 45–64 65+

40% 59 69 65

41% 58 70 68

36% 54 68 69

43% 58 70 70

32% 49 64 68

32% 50 64 67

42% 52 67 69

Source: U. S. Census Bureau, 2005.

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voting is reported have comprised different birth cohorts over time, and the political context of each election is somewhat unique. Moreover, although the connection between age and voting participation has been investigated a great deal, overall the reasons for the relationship remain rather controversial. One factor that contributes to the relatively high turnout rates in old age is age group differences in voting registration, an essential precursor to voting. Table 8-2 shows that in the presidential elections from 1980 through 2004, the rate of registration among persons aged 65 and older was usually the highest among age groups, and substantially higher than the youngest groups. A two-stage study of voter registration and turnout in national elections (Timpone 1998) found that increased age (from age 18 to 88) is monotonically related to being registered (as generally reflected in table 8-2). It also found that age was the second most influential factor (among twenty-one variables) in distinguishing between registrants and nonregistrants. Another aging-related factor, length of residence in one’s home, also had a substantial influence on registration. An additional phenomenon that may contribute to the high voting rates among older people is that persons who are comparatively well informed about politics and public affairs are more likely to register and vote. As McManus (1996, 35) observes, ‘‘Older persons are more likely to pay attention to the news and to rely upon a wider array of news sources to follow public affairs.’’ More specifically, older people tend to be more generally knowledgeable about politics than younger people. In studies and surveys of different cohorts over the years, older persons report the highest level of interest in political campaigns and public affairs generally, and their level of political knowledge shows no sign of decline as they reach advanced old age. Campbell (2003) argues that the very existence of Social Security has fostered seniors’ interest in public affairs and enhanced their feelings of political efficacy as they have achieved the notice of public officials. Still another contributing factor to the high voting rate of older persons is the well-established connection between the strength of political party identification and higher rates of voting participation. Strong partisans are most likely to vote. And older persons identify with the major political parties more strongly than younger persons because their partisan attachments have been reinforced over a long period of time (McManus 1996). TABLE 8-2. Percentage of Persons Registered to Vote in U.S. Presidential Elections, by Age Groups, 1980–2004 Age Group

1980

1984

1988

1992

1996

2000

2004

18–24 25–44 45–64 65+

49% 66 76 75

51% 67 77 77

48% 63 76 78

53% 65 74 77

49% 62 74 77

45% 60 71 76

52% 60 73 77

Source: U.S. Census Bureau, 1998.

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Electoral Impact What impact does the high rate of voting participation by older Americans have on elections? One definite effect is that candidates for office make an effort to court the ‘‘senior vote’’ with policy statements and appear during election campaigns at many senior centers and other settings where older persons congregate. In 2000, for example, both Al Gore and George W. Bush widely promised they would establish prescription drug coverage under Medicare. In 2004, President Bush, while promoting his proposal for partially privatizing Social Security, took pains to repeatedly assert that current seniors and near-seniors would be protected from benefit reductions. Senator John Kerry wooed senior voters by implying that Bush’s proposal would lead to benefit cuts for these same older groups and vowed that he would make feasible the importation of relatively inexpensive prescription drugs from Canada in order to make up for poor drug coverage under Medicare. On the other hand, the high voting participation rate of older persons does not have a distinctive impact on the outcome of elections. To date, older Americans have not shown any tendency to vote as a bloc. Over the years, voters aged 60 and older (the oldest age range consistently reported in exit polls throughout recent decades) have tended to distribute their votes among candidates in presidential elections1 roughly in the same proportions as other age groups (except 18- to 29-year-olds) and the electorate as a whole. As can be seen in figure 8-1, for example, in the vote for Republican presidential candidates from 1980 through 2004, the gap in votes between older voters and the overall electorate ranged from

FIGURE 8-1. Percent of All Voters and Voters Aged 60+ Voting for Republican Presidential Candidates, 1980–2004 Source: Connelly, M. 2004. ‘‘How Americans Voted: A political Portrait.’’ New York Times, Nov. 7: 4wk.

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three percentage points in several elections to nonexistent in the 1992 election. In those instances when the gap reached three percentage points, the difference has not been enough to affect the outcome of the popular vote. In the 2004 election, for instance, if the ballots of voters aged 60 and older had been distributed in the same proportions as the overall national tally—51 percent for Bush and 48 percent for Kerry (rather than the actual 54 percent for Bush and 46 percent for Kerry)—Bush’s margin would have been smaller by 1.4 million votes. Nevertheless, Bush still would have had 1.9 million more votes than Kerry (author’s calculations, based on data from the Edison/ Mitofsky [2004] exit poll). In addition, there are specific examples that clearly contradict the concept that older persons automatically vote against candidates that don’t support old-age entitlements and seek to reduce them. Consider the case of Ronald Reagan. When he ran for president the first time in 1980 he received 54 percent of the elderly vote. After he was elected, he froze an annual costof-living increase in Social Security benefits, and he also proposed a more permanent cut in benefits. Yet, when he ran for reelection in 1984, his share of the elderly vote increased to 60 percent—a figure right in line with the 59 percent Reagan received overall (Connelly 2004). So, despite the fact that older Americans participate in elections at a high rate, there is little indication that they participate as older persons, per se. To be sure, they have self-interests in Social Security, Medicare, and other oldage benefit programs. Yet, there are many reasons why older persons do not vote as a self-interested bloc in response to old-age policy issues. To begin with, there is no sound reason to expect that a birth cohort—diverse in economic and social status, labor force participation, gender, race, ethnicity, religion, education, health status, family status, residential locale, political attitudes, partisan attachments, and every other characteristic in American society—would suddenly become homogenized in self-interests and political behavior when it reaches the old-age category. Old age is only one of many personal characteristics of aged people, and only one with which they may identify themselves. Moreover, if some older voters primarily identify themselves in terms of their age status, this does not mean that their self-interests in old-age policy issues are the most important factors in their electoral decisions. Of greater importance may be partisan attachments, the characteristics of candidates, policies unrelated to old-age interests (e.g., foreign policy), altruism, and many other campaign stimuli. Even if one assumes that rational self-interest is the major determinant of voting behavior (for voters of all ages), the voter’s vision of his or her self-interest may not be the same as the political analyst’s. The analyst’s ‘‘objective’’ characterization of what is at stake for the voter may not correspond to the voters’ subjective judgment. As Nobel Laureate Herbert Simon has described the situation of an individual voter:

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Differences in the kind of evidence you respond to may have nothing to do with your utility function. Instead, they may reflect the model you have of the world, the beliefs you have formed about the meanings and predictive value of different kinds of available information, and what information has come to your attention. (1985, 300)

Finally, the self-interests of older people in relation to old-age policy issues, and the intensity of their interests, may vary substantially. Consider, for example, the relative importance of Social Security as a source of income for aged persons who are in the lowest and highest income quintiles. Social Security provides 83 percent of income for those in the lowest quintile, but only 18 percent for those in the highest (Federal Interagency Forum on Aging-Related Statistics 2008). Some older persons have much more at stake than others do in policy proposals that would reduce, maintain, or enhance Social Security benefit payments. Other Forms of Political Participation The political engagement of older Americans is hardly confined to Election Day. Campbell’s (2003) research on political participation by seniors, summarized below, documents their involvement in other arenas. Their participation rates in these various activities do not match their roughly 70 percent rate of voting. But their engagement is at least comparable to that of other age groups and in some cases greater. Contributing to Campaigns Elders make campaign contributions at higher rates than younger persons. In the 2000 presidential campaign, for instance, 13.7 percent of persons aged 65 and older contributed to a campaign; the proportion for 35- to 64-yearolds was 10.5 percent, and for 18- to 34-year-olds it was less than 3 percent. As a consequence, seniors were 28 percent of all contributors. A much smaller proportion of seniors, just 2 percent, work in election campaigns, but this rate of participation is comparable to those in middle-aged and younger groups. In 2000, older persons were 12 percent of campaign workers. Contacting Representatives By all accounts from congressional staff members, many older persons are not reticent about contacting their representatives regarding old-age policy issues. This is confirmed by Campbell’s analysis of data from the Roper Social and Political Trends Archive, which covers the period from 1973 to 1993. Ten surveys were taken in 1993 that included the following sequence of statement and questions: ‘‘Here is a list of things some people do about government or politics. Have you happened to have done any of those things

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in the past year? Written your Congressman or Senator?’’ (Campbell 2003, 127). The responses indicated that older persons wrote letters to their senators and representatives at about the same rate as middle-aged persons (13 and 14 percent, respectively) and at about twice the rate of the youngest group (6 percent). However, as Campbell notes, the rate at which older persons contact their representatives can be much higher in response to specific policy events. In 1983, for example, the outlook for sustaining Social Security benefits looked bleak until remedial amendments to the program were enacted. During that year, the rate at which seniors contacted their representatives peaked at 20 percent. Membership in Politically Active Organizations Still another avenue of political engagement by older Americans is through membership in a variety of politically active organizations. The political activity of such an organization, however, may or may not be the primary reason that an older person joins it. The National Committee to Preserve Social Security and Medicare (NCPSSM)—founded in 1982 in the midst of a funding crisis in Social Security—has over a million dues-paying members, most of whom are older persons. There is little question why people join NCPSSM. The general outline of its mission is clear enough from its name, and in fact its primary organizational activity is lobbying Congress regarding old-age benefit programs. Similarly, the Gray Panthers, with a multigenerational membership, was founded in the 1970s explicitly as a political action group to lobby and protest for social justice (including old-age policy issues) for persons of all ages. Members have joined the Gray Panthers because they subscribe to its mission and enjoy solidarity with likeminded fellow members. In contrast, the incentives that attract some 39 million members to join AARP (formerly the American Association of Retired Persons) are primarily material and solidary, not political. To be sure, AARP engages substantially in lobbying the federal and state governments regarding policies affecting older persons. In 2006, it spent $67 million, about 6.5 percent of its $1.04 billion budget, on public policy research and legislative lobbying (AARP 2008). In addition, it sponsors a number of volunteer programs. But—unlike NCPSSM and the Gray Panthers—much of the organization is engaged in a large business operation that offers to its members auto, health, prescription drug, and long-term care insurance; mutual funds; credit cards; and support for travel (including hotel and automobile discounts). The largest portion ($403 million) of AARP’s revenue comes from ‘‘royalties and service provider relationship fees’’ on the products and services that it markets to its members. However, even if most AARP members may initially join the organization for nonpolitical reasons, a by-product is that the organization heightens political awareness among its members. The monthly AARP Bulletin features

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stories on Social Security, Medicare, other old-age policies, and the organization’s stances, thereby engendering and maintaining the interest of members in politics. In turn, this interest can trigger various forms of individual political activity by its members. Enrollment by older persons in mass-membership old-age organizations also has some major indirect political effects. Public officials are willing to listen to the views of these ‘‘representatives of the elderly’’ and often find it useful to invite such organizations to participate in policy activities. A brief meeting with the leaders of AARP and other old-age organizations enables an official to demonstrate that he or she has been ‘‘in touch’’ (symbolically) with tens of millions of older persons. This symbolic legitimacy of old-age organizations affords them several types of power. First, they have easy informal access to public officials. Second, their legitimacy enables them to obtain public platforms in the national media, congressional hearings, and other age-related policy forums. And third, old-age interest groups can mobilize their members when changes are being contemplated in old-age programs. Perhaps the most important form of power available to the old-age interest groups is the ‘‘electoral bluff.’’ Although these organizations have not demonstrated a capacity to swing a decisive bloc of older voters, incumbent members of Congress are hardly inclined to risk upsetting the existing distribution of votes that puts them and keeps them in office. The perception of being powerful is, in itself, a source of political influence for these organizations. Hence, when congressional offices are flooded with letters, e-mail messages, faxes, and phone calls expressing the (not necessarily representative) views of older persons, members of Congress do take heed. In the case of AARP, the electoral bluff has been exploited during the 2000s in relation to major policy decisions regarding Medicare and Social Security (see Schulz and Binstock 2008). The organization’s support for the Medicare Prescription Drug Improvement and Modernization Act at a strategic moment in the 2003 legislative process may have been decisive in establishing the program’s coverage for prescription drugs, the largest benefit expansion in Medicare since it was originally enacted in 1965. And the strong distaste among all age groups for President Bush’s 2005 proposal to privatize Social Security may have been fueled considerably by AARP’s public relations campaign against it. BOOMERS AND THE POLITICS OF AGING This review of what we know about the modern politics of aging puts us in position to undertake informed speculation regarding what the political milieu will be like when boomers have joined the ranks of older voters. On the one hand, present and past cohorts of older persons have shown no signs of bloc voting as a response to self-interests in old-age benefit programs.

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On the other hand, politicians do perceive older voters as an electoral constituency, attempt to appeal to them, and fear retribution from them. This, in turn, gives various types of old-age interest groups opportunities for exercising some degrees of influence regarding a variety of minor old-age policies. How will these patterns in the politics of aging play out in the decades immediately ahead? Will the political characteristics and behavior of elderly boomers be different from today’s and yesterday’s elders? Will they band together as an electoral force? Will politicians pander to them—voluntarily or in response to pressures from old-age-based interest groups—by increasing government old-age benefits? Is intergenerational political warfare likely? What broader social forces may shape the future politics of aging? In general, a reading of the modern history of the politics of aging would support the view that Social Security old-age benefits will be maintained for boomers in a form and level roughly comparable to today’s benefits. In no small part, such an outcome would be due to politicians’ concerns about the old-age vote and the strong political presence that AARP has established in the early years of this century. Moreover, despite the revenue demands necessary to do this, history as well as current age group attitudes and studies (e.g., Levy and Schlesinger 2005) suggests that there will not be severe intergenerational warfare. But extrapolation from past and current trends is often a poor mode of prediction in the public policy arena (see, e.g., Aaron 2002), especially when anticipating the state of affairs several decades hence. The prevailing economic and political contexts could be radically different from those of today, giving rise to new forms of age group politics. Some are predicting just such a change. Boomers and Voting Participation How accurate is Lester Thurow’s suggestion that older persons will become a ‘‘voting majority’’? When all boomers are age 65 and older in 2030, they will still be only about 27 percent of voting-age American residents, and some of them will not be able to vote because they aren’t citizens (cf. U.S. Census Bureau, 1998, 2004).2 But the share of votes cast by older Americans will probably be even higher than 27 percent. As noted above, older voters have tended to turn out to vote at a higher rate than younger voters. This pattern will likely continue, even though the various age brackets of voters in the future will be composed of different birth cohorts than in the past. Although some scholars (e.g., Miller and Shanks 1996) have hypothesized that the different age group turnout rates can be explained by cohort replacement, various analyses (e.g., Rosenstone and Hansen 1993; Teixera 1992) have pretty well established that life-cycle factors are at work rather than cohort replacement. This conclusion is reinforced by a study of age-group voting turnout over four decades in Sweden

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and Germany (Myers and Agree 1993). The age-bracket differences in those countries were similar to those in the United States, despite the fact that cohorts in these three nations experienced different political events distinctive to their own countries. All this suggests that boomers will at least continue the pattern of high turnout when they are old, especially given that they have conformed to participation rates of various age-brackets as they have moved through the life course (see table 8-1). Sociologist John Williamson (1998) suggests that the participation rate for boomers when they reach old age may even be greater than those of previous old-age cohorts because, on average, they will have better health and higher levels of education and income than their elderly predecessors. Another factor that may increase the participation rate of boomers in old age is that specific steps are being taken to enhance voting accessibility for elderly voters by improving election procedures and practices (GAO 2008). The factor that is most likely to substantially increase the voting rate of older boomers is their eligibility for old-age entitlement benefits—starting right now for relatively few of them, but eventually swelling to include nearly all boomers—with its consequence that national politicians will increasingly propose (and oppose) significant changes in Social Security and Medicare. Over the next twenty years, the number of individuals eligible for Social Security retirement benefits and Medicare health insurance will essentially double. Projections based on this simple fact as applied to the financing of these benefits, together with the sharply increasing costs of health care, have brought the issues of substantially reforming these entitlement programs to the national policy agenda. They will stay there until Congress and the president deal with them. Between now and then, boomers may increasingly become conscious constituents of these programs. As the trustees of the Social Security system made clear in their latest annual report (Social Security Administration 2007), the longer that reforms in Social Security and Medicare are delayed, the more ‘‘disruptive’’ (read drastic) will be the changes in the programs. Over time, one can easily imagine a presidential election campaign that is highly focused on age-related issues, with the candidates taking starkly opposed policy positions regarding the future of Social Security and Medicare. Depending on the details—for instance, sharp reductions in benefits or new taxes to help sustain the oldage entitlements—such a political context might substantially increase the turnout rate of older boomers. But then, it might also have a similar effect on the turnout among younger groups. So the net effect in terms of the percentage of votes cast by older boomers is impossible to estimate. In short, all that one can confidently predict regarding voting participation is that when all members of the baby-boom cohort are aged 65 and older, the proportion of the total vote that is cast by older people in national elections will probably be significantly higher than it is today. But even so, it is highly unlikely to approach Thurow’s ‘‘majority.’’

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Will Aged Boomers Be Politically Cohesive? Unlike preceding cohorts of older Americans, will aged boomers cast a notably cohesive ‘‘senior vote’’? Is it conceivable that Thurow’s specter of class warfare between the old and the young will materialize? During the late 1960s and early 1970s, the baby-boom cohort was popularly characterized as a monolithic political group, notable for its liberal activism. As political scientist Paul Light notes, its members had much in common: They shared the great economic expectations of the 1950s and the fears that came with Sputnik and the dawn of the nuclear era. They shared the hopes of John F. Kennedy’s New Frontier and Lyndon Johnson’s Great Society, and the disillusionment that came with the assassinations, Vietnam, Watergate, and the resignations. (1988, 10)

Yet, as Light also notes, far from all of the boomers were liberal protesters on college campuses. Some went to Vietnam instead, and others went straight from high school to work. Regardless of stereotypes of the baby boom in this earlier period, it is clear that its members are not homogenous. Members of the boomer cohort are diverse in numerous characteristics relevant to voting behavior, just like members of the cohorts that have preceded them and followed them. Among the sources of diversity, of course, are socioeconomic status, gender, race, ethnicity, religion, immigration, cultural mores, education, health status, geography, and family structure. A MetLife profile of boomers (MetLife Mature Market Institute 2007), compiled from a variety of governmental sources, provides some interesting snapshots of this diversity. For instance, the percentage of boomers who have never married is 12.6 percent, and 14.2 percent of them are divorced. People of Hispanic origin (of any race) constitute 9 percent of boomers, blacks 10 percent, Asians and Pacific Islanders 4 percent, and Native Americans almost 1 percent. In addition, age differences within the boomer cohort have significance. As Williamson (1998) notes, boomers are made up of two subcohorts, those born between 1946 and 1954 and those born between 1955 and 1964. He points out that the economic experiences of these two groups have been different. The demand for jobs and housing was not exceptional when the older boomers entered those markets. But both markets were tight and difficult for the younger boomers. Given the diverse individual characteristics of the boomers, it should not be surprising that collectively they have shown no signs of being or becoming a cohesive voting bloc during the past thirty years. Tracking their votes starting with the 1976 presidential election (the first in which the earliest boomers were old enough to vote) and following them as they have moved into various older age groups in the elections since then, they have tended

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to split their votes for president between the Democratic and Republican parties in harmony with the splits of the electorate as a whole. In 2004, for example, when most of the boomers were in the 45–59 age bracket reported in exit polls, 51 percent of their votes went to President Bush and 48 percent went to Senator Kerry. This exactly matched the figures for the electorate as a whole (Connelly 2004). When boomers reach old age, they are likely to continue splitting their votes among candidates in patterns similar to those of younger age groups, unless the political context of election campaigns is radically different from what it has been over the last three decades. Although boomers will come to share characteristics of old age, this will only be one set of characteristics that members of the group will have. Yet it is possible, under certain circumstances, that old age could become the most important characteristic influencing electoral decisions of boomers. As national politicians come to grips more fully with the fiscal challenges of sustaining Social Security and Medicare, Republican and Democratic candidates might espouse drastically different positions regarding government benefits for older persons. Such a development might especially emerge in the broader context of a prevalent pessimistic viewpoint regarding the country’s economic future. For ultimately, the challenge of sustaining our large governmental expenditures on old-age benefits will depend on whether our nation has enough wealth to do so, as well as on its political will to transfer a significant amount of that wealth to older boomers. In the context of a gloomy economic outlook, for instance, one party might propose substantial cuts in Social Security benefits. In addition, or alternatively, it might endorse retrenchments in existing Medicare coverage for expensive diagnostic tests and medical procedures, as has been urged by prominent opinion makers for many years (e.g., Callahan 1987; Lamm 2002). The platform of the other party could be to preserve Social Security with minor changes and to oppose the notion that Medicare recipients should be denied coverage for the fruits of advances in medical technology and procedures. In such circumstances, the votes of boomers might tend to coalesce as never before, in favor of the latter party, as the self-interest of depending on old-age benefits might well transcend other issues and partisan attachments for a great many (if not all) of them. The coalescence of older boomers as a powerful political force could also be enhanced if AARP succeeds in its efforts to recruit boomers during the next two decades. This possibility, no doubt, is what led Washington Post columnist Robert Samuelson to declaim: Among AARP’s 36 million members, there must be many decent people.. . . But I won’t be joining, because AARP has become America’s most dangerous lobby. If left unchecked, its agenda will plunder our children and grandchildren. Massive outlays for the elderly threaten huge tax increases and other

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government spending. Both may weaken the economy and the social fabric. (2005, A19)

At the turn of the century, the American Association of Retired Persons (as it was known then) had the foresight to recognize that it needed to enroll boomers as members if it wanted to survive over the long run. Part of its marketing effort was to drop ‘‘retired persons’’ from its name in 1998 and officially become simply AARP. And in 2001, the organization launched a new magazine, My Generation, targeted to boomers. Apparently this new publication did not prove to be a successful recruiting tool because it stopped publication after a short period of time. By all accounts, recruitment of boomers to AARP has been disappointing so far, but the organization is persistent in its efforts. In early 2008, it launched AARP-TV, joining forces with Retirement Living TV, a Columbia, Maryland–based seniors network (White 2008). Among its two weekly shows is My Generation, resurrecting the title of the defunct magazine that AARP had targeted to boomers seven years earlier. AARP’s campaign to enroll boomers could be successful in the long run because the material incentives the organization offers to members may very well appeal to boomers as they increasingly enter the old-age category. Alternatively, however, a new organization, say, an American Association of Baby Boomers, might be created and successfully capitalize on the existing moniker for the birth cohort, preempt AARP’s recruitment efforts, and become a political force itself.

Will There Be Intergenerational Warfare? If an overriding ‘‘old-age political consciousness’’ develops among boomers— provoked by drastic proposed changes in old-age policies and/or nurtured by AARP or a similar mass membership organization—it might even be built on and magnified by the creation of a political party to protect the interests of older persons. To be sure, no major old-age parties have yet developed in Western democracies. But a minor precursor of what could develop occurred in the Netherlands in the early 1990s. Controversial Dutch national policies relevant to older people led to the establishment of two national parties, the General Senior Citizen’s Union and Union 55+. Together, in 1994, they won 7 of the 150 seats in parliament (Schuyt, Garcıa, and Knipscheer 1999). If radical proposals for revising Social Security and Medicare are seriously entertained or implemented— and supported by both the Democratic and Republican parties—one could imagine the creation of a Seniors’ Rights party in the United States and the development of the type of intergenerational warfare envisioned by Thurow, Peterson, and some of the many other prophets of doom. Such warfare is possible, but not very likely. Barring a seriously negative economic situation, the policy reforms proposed and acted upon to affect

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the old-age benefits available to boomers are unlikely to involve radical changes. The prime reason is that the political parties and candidates are well aware of the very large latent constituency of older voters that boomers will comprise. And they are likely to both court them and be wary of making enemies of them. Because of this, the likelihood of intergenerational political clashes will be minimized. The experiences of pension reform throughout Europe reinforce this assessment that intergenerational conflict will be minimal when the bulk of U.S. boomers have reached old age. The proportions of European populations that are aged 65 and older have been considerably higher in recent decades than in the United States. In 2005, for instance, the proportion was 19.2 percent in Italy and 18.6 percent in Germany, compared with 12.4 percent in the United States (Berghammer et al. 2006); the average for the European Union (EU) was 16.6 percent. Moreover, the projections for 2030 are much higher: Italy and Germany, 27.5 percent, and the EU 24.7 percent, compared with a U.S. projection of 19.6 percent. These high proportions of older people in European nations are due to ‘‘baby busts’’ rather than baby booms. (The average fertility rate for the EU is 1.5 children per woman, well below the 2.3 rate that is needed to maintain a stable population size.) Facing such proportions of older persons, European nations undertook fifty-five pension reforms between 1986 and 2002 in order to deal with potential fiscal and economic growth problems (Arza and Kohli 2007). Kohli (2007) notes that the politics of these reforms did not provide much evidence of a generational cleavage and conflict. On the basis of their comprehensive book on European pensions reforms, Arza and Kohli (2007, 16) conclude: ‘‘The prediction (or fear) that the political agenda will increasingly be dominated by narrowly conceived old-age interests is thus not warranted.’’ The European experiences also indicate a key factor that helps to minimize the chances of intergenerational conflict, as well as the domination of national politics by old-age interests. It is the design of reforms that have long transition periods, thereby reducing the visibility of benefit cutbacks and rendering them politically viable (Natali and Rhodes 2007). A prime example of such a policy in the United States was the Social Security Reform Act of 1983. It cut back benefits by increasing the ‘‘normal retirement age’’ in the program from age 65 to age 67. But the transition from 65 to 67 was not scheduled to begin until twenty years later, in 2003, and not scheduled to be completed for another twenty-five years, by the end of 2027. In 1983, literally no one was provoked politically by this reform. Today, there is still sufficient time to craft U.S. reforms in old-age entitlements (whether through tax increases, benefit cuts, or both) that employ such a strategy of advance planning, semidistant startup, and gradualism. If such policies are devised, the odds that boomers will unite or be coalesced as a major political force in old age will be substantially reduced. And so will the likelihood of intergenerational political warfare.

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NOTES 1. Although candidates for Congress often stake out positions on old-age policy issues in their campaigns and incumbents have voting records on such issues, congressional elections are excluded from this discussion. In any given election, the circumstances affecting voting participation can vary substantially from one congressional district to another and from one state to another. Such circumstances include, for example, legal and other local practices that facilitate or hinder voter registration; whether a congressional candidate’s seat is ‘‘safe’’ or ‘‘hotly contested’’; scandals or prominent issues that are local in nature; electoral contests for statewide office that may elicit higher-than-usual participation or that may be of less-than-usual interest to potential voters; and many others. For an appropriate analysis of age-group voting participation, factors of this kind would have to be explored in 535 electoral contests—435 for the U.S. House of Representatives and 100 for the U.S. Senate (involving a different third of the states in each of the three senatorial elections that take place during a six-year period). Although these circumstances are also relevant to presidential elections and are worth exploring (see Binstock 1997), their impact on analyses of data from a single nationwide election contest is more diffuse than in the many separate congressional contests. 2. The most recent (2004) Census Bureau projections regarding the age distribution of American residents in 2030 does not break down information on 18- and 19-year-olds from the larger category of ages 5–19. Consequently, the 1998 projections, which do include a category that begins with age 18, are relied on for the total number of voting-age residents.

REFERENCES Aaron, H. J. 2002. Budget estimates: What we know, what we can’t know, and why it matters. In Policies for an aging society, ed. S. H. Altman and D. I. Schactman, 63–80. Baltimore: Johns Hopkins University Press. AARP. 2008. AARP 2006 annual report. Retrieved on February 28, 2008, from http:// assets.aarp.org/www.aarp.org_/build/common/pdf/aarp_2006_annual_report.pdf. Arza C., and M. Kohli. 2007. Introduction: The political economy of pensions reform. In Pension reform in Europe: Politics, policies and outcomes, ed. C. Arza and M. Kohli, 1–21. London: Routledge. Berghammer, C., R. Gisser, W. Lutz, M. Mamolo, D. Phillipov, S. Scherbov, and T. Sobotka. 2006. European demographic data sheet: 2006. Vienna: Austrian Academy of Sciences; Washington, DC: Population Reference Bureau. Binstock, R. H. 1997. The 1996 election: Older voters and implications for policies on aging. The Gerontologist 37(1): 25–39. Callahan, D. 1987. Setting limits: Medical goals in an aging society. New York: Simon & Schuster. Campbell, A. L. 2003. How policies make citizens: Senior political activism and the American welfare state. Princeton, NJ: Princeton University Press. Connelly, M. 2004. How Americans voted: A political portrait. New York Times. November 7. Edison/Mitofsky. 2004. U.S. President/national/exit poll. Retrieved on November 4, 2004, from http://www.cnn.com/ELECTION/2004/pages/results/president/?TTFUID =NSELCT3.

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Federal Interagency Forum on Aging-Related Statistics. 2008. Older Americans update, 2006: Key indicators of well-being. Washington, DC: U.S. Administration on Aging. GAO (United States Government Accountability Office). 2008. Elderly voters: Some improvements in voting accessibility from 2000 to 2004 elections, but gaps in policy and implementation remain. Testimony by Bovbjerg, B. D., and Jenkins, W. O., before the Special Committee on Aging, United States Senate, January 31, 2008. Retrieved on January 31, 2008, from http://www.gao.gov/highlights/d08209high.pdf. Kohli, M. 2007. Generational equity: Concepts and attitudes. In Pension reform in Europe: Politics, policies and outcomes, ed. C. Arza and M. Kohli, 196–214. London: Routledge. Lamm, R. D. 2002. The moral imperative of limiting elderly health entitlements. In Policies for an aging society, ed. S. H. Altman and D. I. Shactman, 196–216. Baltimore: Johns Hopkins University Press. Levy, B. R., and M. J. Schlesinger. 2005. When self-interest and age stereotypes collide: Elders opposing increased funds for programs benefiting themselves. Journal of Aging and Social Policy 17 (2): 25–39. Light, P. C. 1988. Baby boomers. New York: W. W. Norton. McManus, S. A. 1996. Young v. old: Generational combat in the 21st century. Boulder, CO: Westview Press. MetLife Mature Market Institute. 2007. A profile of American baby boomers. Retrieved on February 29, 2008, from http://www.metlife.com/WPSAssets/ 86451660901172586182V1FBoomerProfile2007.pdf. Miller, W. E., and J. M. Shanks. 1996. The new American voter. Cambridge, MA: Harvard University Press. Myers, G. C., and E. M. Agree. 1993. Social and political implications of population aging: Aging of the electorate. In Proceedings of the International Population Conference, Montreal 1993, 3:37–49. Liege, Belgium: International Union for the Scientific Study of Population. Natali, D., and M. Rhodes. 2007. The ‘‘new politics’’ of pension reforms in Continental Europe. In Pension reform in Europe: Politics, policies and outcomes, ed. C. Arza and M. Kohli, 25–46. London: Routledge. Peterson, P. G. 1999. Gray dawn: How the coming age wave will transform America— and the world. New York: Times Books. Rosenstone, S. J., and J. M. Hansen. 1993. Mobilization, participation, and democracy. New York: Macmillan. Samuelson, R. J. 2005. AARP’s America is a mirage. Washington Post. November 16. Schulz, J. H., and R. H. Binstock. 2008. Aging nation: The economics and politics of growing older in America. Baltimore: Johns Hopkins University Press. Schuyt, T., L. L. Garcıa, and K. Knipscheer. 1999. The politics of old age in the Netherlands. In The politics of old age in Europe, ed. A. Walker and G. Naegele, 123–34. Buckingham, PA: Open University Press. Simon, H. A. 1985. Human nature in politics: The dialogue of psychology with political science. American Political Science Review 79:293–304. Social Security Administration. 2007. Status of the Social Security and Medicare programs: A summary of the 2007 annual reports. Retrieved on February 25, 2008, from http://www.ssa.gov/OACT/TRSUM/trsummary.html.

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Teixera, R. A. 1992. The disappearing American voter. Washington, DC: Brookings Institution. Thomas, L., Jr. 2008. Reconciling opposites: A crusade against cozy tax breaks, led by one who benefited. New York Times. February 15. Thurow, L. C. 1996. The birth of a revolutionary class. New York Times Magazine, May 19, 46–47. Timpone, R. J. 1998. Structure, behavior, and voter turnout in the United States. American Political Science Review 92:145–58. U.S. Census Bureau. 1998. Current population reports, series P2 (Middle Series Projections). Washington, DC: GPO. ———. 2004. U.S. interim projections by age, sex, race, and Hispanic origin. Retrieved on February 24, 2008, from http://www.census.gov/ipc/www/usinterimproj/. ———. 2005. Reported voting and registration by race, Hispanic origin, sex, and age groups: 1964 to 2004 Retrieved July 7, 2005, from http://www.census.gov/ population/www/socdemo/voting.html. White, T. 2008. AARP is launching foray into TV aimed at seniors: Group joining forces with Columbia network. Retrieved on March 7, 2008, from www.baltimoresun. com/business/bal-bz.md.seniortv07/mar07,0,2088137.story. Williamson, J. B. 1998. Political activism and the aging of the baby boom. Generations 22 (1): 55–59.

9

Aging Boomers, Generational Equity, and the Framing of the Debate over Social Security JOHN B. WILLIAMSON AND DIANE M. WATTS-ROY*

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ver the next few decades, the United States (and many other nations around the world) will be contending with the burden of financing the retirement of the baby-boomer generation. With the retirement of these very large cohorts will come pressures to substantially increase government spending on old-age pensions and health care. For the United States, one consequence of this projected demographic shift, and the associated increase in number of people eligible for pension and health insurance benefits, is the projected depletion of the Social Security and Medicare trust funds in the not-too-distant future. Current projections suggest that if no policy changes were to be made in the years ahead, the Social Security trust fund would be depleted by 2041. This does not mean that there would be no money to pay Social Security pensions, as billions of dollars would continue to be collected each year, but that benefits would have to be reduced by about 25 percent or that payroll taxes would have to be increased, at that point, by about 32 percent (i.e., four percentage points, with half of this increase paid by employers) (Board of Trustees 2007).

*Portions of this material have been adapted from Williamson, J. B., T. K. McNamara, and S. A. Howling, ‘‘Generational Equity, Generational Interdependence, and the Framing of the Debate over Social Security Reform.’’ Journal of Sociology & Social Welfare 30 (2003): 3–14. Used with permission.

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Few analysts believe that this scenario will be played out; most expect that changes will be made long before 2041. However, such projections do suggest that some changes will be needed to deal with the retirement of the boomers, and they will be the type most politicians try to avoid. Most likely, the changes will involve a combination of direct and indirect benefit cuts and tax increases. Such projections have led to much discussion about how best to bring projected pension benefits and revenues into balance. Central to this debate are the explicit and implicit discussions about whom to ask to contribute more taxes and whom to ask to accept lower benefits. Many analysts are also asking about race, class, gender, age, and cohort (generation) differences with respect to how the burden should be shared (Kohli 2006; Kingson 2007; Baker and Weisbrot 1999). In this chapter, we will be analyzing the ideological contest between two major frameworks for thinking about the share of societal resources that ought to go to elder members of American society. One framework is often referred to as the generational equity perspective and the other as the generational interdependence perspective (Williamson 2007; Williamson and WattsRoy 1999). This discourse goes by various names, but the most common is the ‘‘generational equity debate.’’ This debate emerged between the late 1970s and the mid-1980s as part of an ideological swing to the right in American society. The debate’s emergence was linked to a confluence of several economic, political, and demographic forces. Due to a combination of falling birth rates, increasing life expectancy, the declining age of retirement, and the size of the boomer cohorts, demographic projections began pointing to a dramatic drop in the future ratio of workers to retirees, particularly once the boomers started to retire. These trends raised questions about the projected economic burden future retirees would place on the Social Security program and the associated increases in payroll taxes on future workers. Changing economic conditions during the 1970s, including two major oil embargoes, the associated declines in the rate of economic growth, and the combination of high inflation and high unemployment referred to as ‘‘stagflation,’’ all taken together, made Americans increasingly pessimistic about their economic future (Kuttner 1980). Political problems such as the war in Vietnam, the Watergate scandal, the failure of most ‘‘War on Poverty’’ programs, and the Iranian hostage crisis contributed to a decline in public confidence in the government’s ability to effectively deal with societal problems. The combination of all the above factors made the American public increasingly reluctant to support social programs designed to help various vulnerable groups, including retirees (Powell, Williamson, and Branco 1996). Concurrently, increasingly well-funded conservative think tanks and foundations such as the Cato Institute, the American Enterprise Institute, and the Heritage Foundation helped to catalyze a sharp shift to the political right. The resulting ascendancy of the conservative wing of the Republican Party was capped by the 1980 election of Ronald Reagan as president. Soon many social programs, including even the nation’s single most popular

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government program, Social Security, were coming under intense criticism (Beland 2005; Williamson, McNamara, and Howling 2003). Social Security was subjected to intense scrutiny for several reasons. First, of all the old-age policies, Social Security was by far the most costly. Second, demographic projections pointed to the impending retirement of the very large cohorts associated with the boomer generation. A third factor was Social Security’s first short-term financing shortfall in the late 1970s—due in part to a combination of high inflation, high unemployment rates, and low wage increases, as well as a rising number of people receiving pension and disability benefits (Berkowitz 1997). In addition to unfavorable demographic trends, a faulty cost-of-living formula enacted in 1972 also contributed to the projected long-term financing shortfall. While conservatives attempted to define the financing problem as a ‘‘crisis,’’ liberals tried to depict it as a relatively easy-to-manage short-term funding problem. Conservative efforts to frame the Social Security financing problem as a crisis represented a deliberate effort to undermine public confidence in the program as part of a broader effort to reduce government spending and ultimately the size of the American welfare state (Beland 2005; Powell, Williamson, and Branco 1996; Butler and Germanis 1983). In response to these funding problems, the Social Security program was amended first in 1977 and then again in 1983. Although these reforms ensured that Social Security would take in more revenues than it paid out as pension benefits, at least for the next few decades, the process sparked an enduring debate over Social Security, and, as we shall see, the issue of generational equity became central to that debate. FRAME ANALYSIS OF THE GENERATIONAL EQUITY DEBATE What eventually came to be referred to as the generational equity perspective began to emerge as a subtext of the Social Security ‘‘crisis’’ frame in the early 1980s. Conservative critics of the Social Security program argued that it was a pyramid scheme in which younger working-age adults were paying into a system from which they would get little or nothing in return; this argument is still being repeated today (Longman 1982; Lamm 2007). In part, this argument is premised on the idea that the Social Security system will go bankrupt before younger workers reach retirement age. Some conservative commentators began to use terms such as ‘‘justice between generations’’ and ‘‘generational equity’’ to describe the projected conflict of financial interests between different age groups (Longman 1985). While conservative policy analysts found it very effective to use the term generational equity when writing about old-age policy, most liberal analysts and commentators were much more comfortable with such terms as generational interdependence or intragenerational equity (Kingson, Hirshorn, and Cornman 1986). However, in the end it was the proponents of the

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generational equity frame who were most successful in marketing their catch phrase to refer to, and thus help frame the debate over, distributional aspects of old-age policy reform. This has become the term most often used, even by many liberal commentators, when referring to this set of issues. The debate is as much a symbolic contest as a disagreement over specific policies. The competing advocacy networks, representing the ‘‘generational equity’’ and ‘‘generational interdependence’’ frames, attempt to depict their respective interpretative packages in ways that resonate with larger cultural themes. Below, we outline the core elements of each interpretative package and the strategies that each advocacy network has used to promote its views. The way in which an advocacy network promotes its interpretative package affects the extent to which a frame becomes accepted. Consequently, each group adopts rhetorical strategies in an effort to make its interpretative package appear more appealing and credible than the alternative frame. (For discussions of how to do frame analysis, see Gamson 1992 and Lakoff 2004.) The Generational Equity Perspective At the heart of the generational equity interpretative package is the idea that each generation should provide for itself. Proponents of generational equity generally offer ways to view old-age policy that lead to proposals to cut back on entitlement programs, such as Social Security, or would at least partially privatize such schemes. Beginning in the mid-1980s, advocates of the generational equity perspective argued that there was a conflict of interest between elders and the working-age population. These advocates included several well-known conservative journalists, such as William F. Buckley Jr., as well as other commentators linked to conservative think tanks such as the Cato Institute and conservative foundations such as the Olin Foundation. The advocacy network also included organizations that explicitly focused on promoting generational equity. For instance, Senator David Durenberger founded Americans for Generational Equity (AGE), an organization that was funded largely by conservative foundations and businesses (Binstock 1999; Quadagno 1989). Both AGE and other advocates of the generational equity perspective repeatedly cited the work of well-respected demographer Samuel Preston (1984), who presented evidence that the economic status of elders had been improving while that of children had been deteriorating. He interpreted his data in such a way as to suggest that the improved conditions of elders had been achieved, at least partially, at the expense of children. Advocates for the generational equity perspective often argued that due to overly generous spending on programs for elders, young adults and children were being shortchanged. The generational equity frame combines claims of fairness and of affordability (Marmor, Cook, and Scher 1999). Specifically, the advocates of this frame argue that most of today’s elders are financially secure. This claim is

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partly based on statistics showing that, in the aggregate, the well-being of elders has improved over the past several decades. For instance, between 1959 and 1987, the percentage of those age 65 and over living below the poverty line fell from 35 percent to 12 percent (Clark 1990). By 2005, it had fallen further to 10 percent, considerably below the 18 percent rate for those under age 18 (DeNavas-Walt, Proctor, and Lee 2006). The claim that elders are for the most part economically secure is based to some extent on fact, but it downplays the diverse economic conditions among different subgroups of elders. While poverty rates for those age 65 and older have declined, the incomes of many continue to hover close to the official poverty line. For example, in the late 1990s, while only 11 percent of elders were below the poverty line, more than 25 percent of elders were ‘‘near poor,’’ defined as having incomes less than 150 percent of the poverty level. In addition, poverty rates for some subgroups, such as minority elders and those over the age of 85, were far higher than the data for the average senior. In 1998, approximately 27 percent of elder blacks, 21 percent of elder Hispanics, and 49 percent of elder black women living alone had incomes below the poverty line (Crown 2001). Poverty rates are high not just among elder black and Hispanic women but also among elder white women, particularly those who are divorced or widowed (Estes 2004; Williamson and Rix 2000). Another claim by advocates of the generational equity frame is that elders are getting more than their fair share of government resources, often at the expense of young adults and children (Chakravarty and Weisman 1988; Farlie 1988). They contend that high federal spending on elders has contributed to the poverty rate of children. Reducing spending on Social Security and Medicare, they argue, would free up money for programs for children and young adults (Silverstein et al. 2000). Advocates of the generational equity frame often base their claims on data about the proportion of government social spending that is directed toward elders. The lion’s share of the nation’s social welfare spending is, in fact, for programs that benefit elders. In 2004, about one-third of the federal budget was spent on Social Security, Medicare, and Medicaid, as has been the case for more than a decade (Binstock 2007; Congressional Budget Office 2004). However, there is very little evidence that current old-age policies are directly or indirectly harmful to the welfare of children and young adults. Critics of the generational equity frame point out that the modest increase in the poverty rate among children, from 16 percent in 1979 to 18 percent in 2005 (DeNavas-Walt, Proctor, and Lee 2006), is most likely due to other factors such as increases in single-parent households and declining wage rates. In addition, the claim that elders are getting more than their fair share of resources is premised in part on the idea that elders are affluent and need the benefits of public social programs less than children. However, as discussed above, there is much diversity among this population. While some elders are affluent, many are not.

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The advocates of the generational equity frame claim that policies unfair to working-age adults have thrived in part due to the political influence of old-age interest groups such as AARP (Farlie 1988; Longman 1989). The argument that elders use their political power to promote their own economic interests is loosely rooted in the fact that elders do form a larger percentage of the electorate today than do families with children (Binstock 2000). However, the advocates of the generational equity framework ignore two related facts about the voting behavior of elders. First, elders tend to carry ideological orientations from midlife into old age, and they seldom vote as a monolithic block (Binstock 2000). For instance, a small, unrepresentative group of comparatively affluent older persons voted for the repeal of the Medicare Catastrophic Coverage Act of 1988 (Binstock 1995). This act benefited economically vulnerable elders, but much of the tax burden was borne by the smaller group of affluent elders. Thus, the interests of different subgroups of elders do not always converge. Second, the interests of elders do not always diverge from those of children and working-age adults. True, there is evidence that elders sometimes do use their voting power to support policies that benefit their age group at the expense of young adults and children (Rosenbaum and Button 1989). However, there is also evidence that both younger and older Americans often oppose cutting spending on education, student loans, and health programs for women and children (Minkler 1991). In fact, during the 1980s, while advocates of the generational equity frame warned against the disproportionate power of elders, spending on schools rose more than 2.4 percent faster than inflation (Moody 1992). Thus, the claim that elders use their political power to promote policies advantageous to them and disadvantageous to other age groups is often overstated. Another claim associated with the generational equity frame is that current old-age policies are unsustainable due to the nation’s changing demographic structure. As the population ages, the argument goes, these policies will become unaffordable (Concord Coalition 1993; Peterson 1996). This claim is often supported with data about dependency ratios. The dependency ratio is a measure of the economic burden of the population not in the paid labor force to those who are in the paid labor force. In the decades ahead, the ratio of elders to the working-age population will increase in all industrialized nations. While the claim that policies such as Social Security and Medicare are unsustainable are to a degree based on demographic trends, old-age dependency ratios are only part of the story. For instance, while it is true that the old-age dependency ratio has increased, the childdependency ratio has decreased (Marmor, Cook, and Scher 1999). In addition, the relative number of people in different age categories is used as a proxy to estimate the burden of elders on the working-age population. This approach does not take into account the many elders who remain in the labor force (Binstock 1999). Thus, while population aging is a demographic

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reality, an emphasis on projected changes in the old-age dependency ratio tends to overstate the severity of the problem. Finally, advocates of the generational equity frame argue that because old-age policies are unsustainable, it is unfair to expect each generation to support the one that precedes it (Kotlikoff and Burns 2004; Borden 1995). They argue that the pay-as-you-go system by which current workers support current retirees presumes that each generation can and should be supported by the generation that follows. However, if today’s working-age adults cannot count on the same level of Social Security, Medicare, and Medicaid benefits when they retire as their parents’ generation is receiving today, the pay-as-you-go system is unfair. The argument is that while many current retirees are receiving more in benefits than can be justified based on their payroll contributions, today’s young adults will generally receive much less than they have contributed. Rather than assuming that each generation should support the generation that precedes it, advocates of the generational equity frame typically believe that each generation should be responsible for itself (Kotlikoff 1992; Longman 1989). In general, advocates of the generational equity perspective make claims based loosely on fact, but overlook other important factors. However, the frame has appeal to many Americans because it resonates with individualism, a dominant value in American culture. Individualism is linked to values of autonomy, personal ownership, liberty, individual responsibility, and personal freedom. Although advocates of the generational equity framework are not opposed to redistribution within families or voluntary redistribution by charitable organizations, they oppose ‘‘mandatory’’ redistribution through government programs. Social Security and Medicare, by this argument, infringe on individual freedoms and make people less likely to rely on themselves to plan their retirement. Those who favor the generational equity frame suggest that people who oppose the partial privatization of Social Security or cutbacks on entitlement programs lack an ethic of work and individual responsibility. According to this frame, we need to ensure an equitable distribution of resources across generations, both today and in the future. At the same time, we need to emphasize deeply held American values such as thrift, selfreliance, and limited government. Reducing government spending on elders is one way to encourage self-reliance and to discourage an entitlement ethic. Generational Interdependence Perspective Critics of the generational equity frame have proposed an alternative interpretative package often referred to as the generational interdependence frame. This frame arose largely out of the criticisms of the generational equity frame (Williamson and Watts-Roy 1999). In addition to the various arguments offered so far that question the claims of the generational equity frame, this alternative interpretative package makes several more assertions.

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The first is that different generations have much to offer one other. For instance, the authors of Ties That Bind, a report commissioned by the Gerontological Society of America, argue for a perspective on social policy that focuses on the interdependence between generations (Kingson, Hirshorn, and Cornman 1986). The gains of one generation are not necessarily achieved at the expense of others. Economic changes, increases in single-parent households, and cutbacks on social spending for the poor, they argue, are more directly linked to the increase in poverty rates for children than is federal spending on elders. Generations United is one of the most active advocacy organizations with a focus on promoting and celebrating interdependence among generations (Kingson 2007; Rother 2007). Advocates of the generational interdependence frame point to the ways in which policies that benefit elders often also indirectly benefit young adults. For instance, Kuttner (1982) argues that critics of the Social Security system, focusing on the economic drawbacks of the system for the working-age population, underestimate the benefits to the adult children of elders. Even with Social Security and Medicare, the adult children of elders often take their parents into their homes or provide them with financial assistance (Foner 2000). Reducing Social Security and Medicare benefits, rather than lessening the burden on the working-age population, would put millions of families under pressure to provide economic support for their aging parents. Advocates of the generational interdependence frame also argue that elders have a stake in policies targeting young adults and children. Kingson, Hirshorn, and Cornman (1986), for instance, argue that elders benefit from programs directed toward the young in several ways. They note that the economic interests of elders are tied to the productivity of future workers. Thus, elders indirectly benefit from education spending that makes future workers more productive. Advocates for elders often have a stake in policies that benefit both elders and children. These policies include income maintenance policies such as unemployment insurance, health care programs such as Medicaid, and other programs such as transportation and caregiving services. Social Security itself provides direct benefits to millions of people who are not elders, including 3.8 million children (of disabled, retired, or deceased workers), 4.9 million disabled workers, and 4.7 million spouses of deceased workers (Congressional Budget Office 2001). Many of these people would be economically dependent upon their elder parents, or in some cases their adult children, were it not for these Social Security benefits (Kingson and Williamson 2001). Proponents of the generational interdependence frame point to the twoway flow of services and support between different generations. While many working-age Americans act as caregivers for elders, there are also many ways in which elders contribute to the welfare of the working-age population. Elder parents are often caregivers for grandchildren and functionally disabled family members. More than one in ten elders has been responsible for at least one grandchild for at least six months. In 1994, some 3.7 million

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grandchildren lived in the homes of their grandparents (Saluter 1996). Additionally, a substantial portion of the financial support provided to family members is provided by elders (Rubinstein 1993). Finally, many elders provide psychological and financial support to their adult children. By focusing on several different fronts, the advocates of the generational interdependence perspective emphasize what each generation has to offer other generations rather than accentuating conflict between generations. Another claim of the generational interdependence frame is that elders must be viewed as heterogeneous, not homogeneous. Some critics of the generational equity frame note that it focuses on equity between generations at the expense of other kinds of equity, such as those linked to race, class, and gender. A core disagreement between the generational equity and generational interdependence frames is how public policy ought to treat equity between generations compared to equity between other groups, such as the haves and the have-nots (Kingson 2007). While some elders are affluent, others need substantial financial assistance. Economically vulnerable groups tend to be overlooked in the generational equity perspective (Kingson and Williamson 1993). Proponents of the generational interdependence frame view the generational equity frame as overly simplistic, neglecting economic needs related to inequality within a generation (or age cohort) in the name of reducing inequality in federal spending levels between cohorts. The generational interdependence perspective has generally been less successful than the generational equity perspective in framing debates about oldage policy in the American mass media. In part, this is because the generational interdependence frame focuses on the community obligation to provide for vulnerable populations. In this context, critics of proposals to privatize Social Security argue that the more privileged members of society have an obligation to protect low-wage and vulnerable workers in retirement (Ball and Bethell 2000; Quadagno 1996). Historically, except under very special circumstances such as the Great Depression, the countertheme of community obligation has been less powerful than the dominant theme (or value) of individualism. Thus, advocates of the generational interdependence perspective often find themselves at a disadvantage, as their interpretative package generally resonates less strongly with dominant American cultural values. GENERATIONAL EQUITY AND SOCIAL SECURITY REFORM Over time, the focus of the generational equity debate has shifted. At the outset, the focus was on the fairness of what was perceived as overly generous Social Security pension benefits during the 1980s. Subsequently it evolved into a debate over the projected growth in entitlement spending. Proponents of the ‘‘entitlement crisis’’ thesis draw on ideas about equity between generations to call for cuts in spending, particularly projected future spending on such entitlement programs as Social Security and Medicare (Peterson 1996). Advocates of

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the entitlement crisis argument are among those who have pushed for the means-testing or income-testing of Social Security benefits (Howe and Longman 1992). Supporters of the generational interdependence frame tend to be critical of this proposed means-testing because it would undermine the political support for Social Security, which in turn would very likely lead to an erosion of benefits over time (Kingson and Schulz 1997). Another form the generational equity debate has taken has been the discourse concerning ‘‘generational accounting,’’ first proposed by economist Laurence Kotlikoff and his associates (Kotlikoff 1992; Kotlikoff and Burns 2004). Kotlikoff’s complex economic models purport to present a precise— some would say more scientific—formulation of the generational equity arguments. His models lead to the conclusion that under current legislation each generation can expect to pay a heavier tax burden than the generation before it. Critics of generational accounting affiliated with the generational interdependence advocacy network call into question a number of the economic assumptions built into Kotlikoff’s models, including the neglect of the nonmarket reproductive labor of women (Estes 2004; Baker and Weisbrot 1999; Binstock 1993).

PARTIAL PRIVATIZATION OF SOCIAL SECURITY? Of the many proposals for reform that have been made in recent years, the press has given the most attention to those calling for the partial privatization of Social Security through the introduction of individual accounts. Some see the introduction of these individual accounts as an end goal; others see such a reform as a first step toward what they hope will eventually become the full privatization of Social Security (Ferrara and Tanner 1998; Peterson 1999). This issue has been at the core of the generational equity debate in the United States in recent years. Proponents of generational equity are on record in support of introducing individual Social Security accounts (partial privatization), while advocates of the generational interdependence frame have opposed the various proposals to partially privatize the scheme. Why are such accounts opposed? There are many reasons (Williamson 1997). One major reason is that they tend to be associated with schemes that will shrink the traditional defined benefit component of Social Security, the component that is guaranteed by the government. Another is that such accounts would expose many of the most economically vulnerable to unacceptable levels of risk due to fluctuations in financial markets (Szinovacz 2003; Munnell 2001; Ginn and Arber 2000). Policy analysts linked to the libertarian Cato Institute have been making proposals along these lines since the early 1980s (Ferrara 1985). Prior to the mid-1990s, such proposals were associated with the radical right and not

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taken very seriously by mainstream Social Security policy analysts. This changed in the mid-1990s due to the attention given to such proposals by the Bipartisan Commission on Entitlement and Tax Reform (1995) and the Advisory Council on Social Security (1997). More recently, three alternative privatization proposals were outlined by President Bush’s commission on Social Security released at the end of 2001 (President’s Commission to Strengthen Social Security 2001). The report of this commission was yet another effort to build support for the partial privatization of Social Security. While this report did not get much attention between 2002 and the end of 2004, after Bush won reelection in 2004, he made one last push to build the political support that would be needed to enact the legislation that would partially privatize Social Security. He made the idea of introducing individual accounts a central theme in his 2005 State of the Union Address and then went on to spend much of the next six months traveling around the country giving talks designed to build support for the idea. His goal seems to have been to make this one of the major policy legacies of his presidency. In the end, the effort failed. Democrats were unified in opposition, and many Republicans, particularly those who would be up for election in 2006, made it a point to distance themselves from what had become a very unpopular proposal. It seems that the more the public learned about what such a scheme would look like, the less they liked it. Between the mid-1990s and about 2005 there was relatively little mention of the concept of generational equity in connection with the debate over Social Security reform. Advocates of partial privatization for the most part shifted to arguments emphasizing the ownership and personal economic self-interest aspect of the personal accounts (Svihula and Estes 2007), the ability to pass assets in those accounts to friends and relatives, and what some referred to as the potential for class warfare (a dramatic way of referring to the potential increase in the tax burden on the affluent due to some of the reforms that were being suggested, such as a sharp increase in the cap on earnings subject to the payroll tax) in the future to cover the projected gap between revenues collected and benefits promised (Hewitt 2007). On the left, the response was to emphasize the risk associated with assets invested in equity markets and the huge profits investment banks stood to make (White 2001; Baker and Weisbrot 1999) THE FUTURE OF THE DEBATE The first wave of the boomer generation is now starting to draw Social Security pensions. In the years ahead, the number of recipients and the cost of paying those pensions will both be increasing sharply. Relatively soon after the 2008 election, we expect the issue of Social Security reform to again become central to the nation’s policy agenda and, with it, debates that evoke themes of generational equity and generational interdependence.

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There is every reason to believe that as the boomers continue to age and more of them retire, there will be an ever-increasing pressure to make some of the hard choices about Social Security reform that politicians have been putting off for many years. In large measure, the advocacy networks that have dominated the debates and shaped old-age policy in recent decades will be back at work attempting to frame these debates in ways that are advantageous to their respective constituencies. Modern telecommunication technologies tend to emphasize sound-bite messages and to deemphasize nuanced, fine-grained analyses calling for a careful weighing of the potential benefits and risks associated with alternative policy alternatives. As a result, it is likely that many consumers of the information that will be put out in connection with these policy debates will not be fully informed about the long-term risks and distributional consequences associated with the proposed changes. Most likely, these debates will be dominated by advocacy organizations focusing on oversimplified arguments involving easily digested catch phrases and metaphors. In such an environment, skill in framing the issues will become increasingly relevant to the success of the competing advocacy networks. While the broad outline of the generational equity debate is likely to parallel what we have seen over the past twenty years or so, there is evidence that some important changes are taking place. The rhetoric of the environmental movement is, interestingly enough, being mixed with the rhetoric of both generational equity and generational interdependence interpretative packages. Discussions of generational equity are being linked to discourse about ecological issues and concepts such as sustainability, thrift, conservation, efficiency, and waste reduction (Kohli 2006; Schor 2004). From organizations such as Americans for Generational Equity, we will be seeing more references to ‘‘sustainability,’’ a term that is being used more and more often, in part due to its positive connotations to environmentalism—the argument being that the current levels of Social Security pension benefits and Medicare reimbursements will not be sustainable in the decades ahead. Those supporting the generational interdependence perspective will continue to make the argument that policy makers should not be narrowly focused on how to reduce the gap in government pension spending between different generations (or more precisely age cohorts), but instead should focus on dealing with other forms of inequality such as the pension income gaps between men and women, blacks and whites, the affluent and poor. A new theme that we anticipate hearing more about in connection with the generational interdependence frame is how to combine concerns about generational justice and environmental justice. There is going to be more focus in the decades ahead on increasing spending on environmental issues such as global warming so as not to leave a huge ecological burden on the post-boomer generations (Kingson 2007). While there was a period between about 1995 and 2005 when there was a drop in explicit mention of generational equity, recently we have started to

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see more references to themes linked to this debate in discussions of aging policy. One reason is the recognition that, as each year passes, the number of boomers who are retired, retiring, or approaching retirement is increasing. There is acknowledgment by many on the political right that this demographic trend is going to make it increasingly difficult to get the political support needed to enact the partial privatization of Social Security. One reflection of the resurgence of the contest between those advocating policies consistent with the two competing frames is the emergence in 2006 of an organization called Americans for Generational Equity (AGE). This is the same name and includes many of the same leaders and sources of funding as the earlier AGE organization that debuted in 1985 but closed in 1990 (Kingson 2007). Another organization has emerged with the name ‘‘For Our Grandchildren.’’ As with other conservative organizations that focus on the generational equity frame and policy agenda, it does not push for more spending on programs for children, but rather on efforts to partially privatize Social Security in the name of helping today’s children when they become taxpayers and eventually Social Security recipients. Other organizations, such as Generations United and AARP, are also trying to influence policy, but in ways that are consistent with generational interdependence themes. In the case of Generations United, the concern with the social welfare of both children and elders, with particular attention to finding ways to bring these groups together for mutual benefit, is particularly transparent. Within the next few years, it is likely that some important changes will be made in Social Security policy in an effort to bring projected long-term revenues and pension expenditures into balance. Quite possibly the changes will be based on policies proposed by a truly bipartisan commission on Social Security policy along the lines of the commission that proposed the changes made in 1983. If done under a Democratic administration, the reformed system will probably be very similar to the current system, which has proven to be the nation’s most popular social program for many decades. It is not at all clear at this point that reforms will be seriously entertained by any such commission that would attempt to make a more systematic effort to balance the burden of dealing with future financing problems between the workers who are paying the payroll taxes used to finance pensions and retirees who are living on those pensions. However, there are countries that are exploring such alternatives. Some of the reforms being considered could, at least in theory, be adapted for use in the United States with the goal of increasing equity between age cohorts (generations) without subjecting economically vulnerable segments of the population to the vicissitudes of financial markets. Any future bipartisan commission dealing with Social Security reform in the United States would do well to take a close look at the pros and cons of some of these schemes, most notably the notional (unfunded) defined contribution (NDC) models that have already

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been introduced in countries such as Sweden, Poland, and Latvia, as well as an even newer idea referred to as the fixed relative position (FRP) model (Williamson 2004; Myles 2002). Closer to home, Diamond and Orszag (2004) offer a number of innovative ideas that deserve serious consideration, including their concept of ‘‘legacy debt,’’ which could help with burden sharing between age cohorts without the typical regressive consequences. REFERENCES Advisory Council on Social Security. 1997. Report of the 1994–1996 Advisory Council on Social Security. Vol. 1, Findings and recommendations. Washington, DC: GPO. Baker, D., and M. Weisbrot. 1999. Social Security: The phony crisis. Chicago: University of Chicago Press. Ball, R. M., and T. N. Bethell. 2000. Insuring the essentials: Bob Ball on Social Security. New York: Century Foundation. Beland, D. 2005. Social Security: History and politics from the New Deal to the privatization debate. Lawrence: University Press of Kansas. Berkowitz, E. D. 1997. The historical development of Social Security in the United States. In Social Security in the 21st century, ed. E. R. Kingson and J. H. Schulz, 22–38. New York: Oxford University Press. Binstock, R. H. 1993. Will ‘‘generational accounting’’ doom the welfare state? Gerontologist 33:812–16. ———. 1995. The oldest old and ‘‘intergenerational equity.’’ In The oldest old, ed. R. M. Suzman, K. G. Manton, and D. P. Willis, 394–417. New York: Oxford University Press. ———. 1999. Scapegoating the old: Intergenerational equity and age-based health care rationing. In The generational equity debate, ed. J. B. Williamson, E. R. Kingson, and D. M. Watts-Roy, 185–203. New York: Columbia University Press. ———. 2000. Older people and voting participation: Past and future. Gerontologist 40:18–31. ———. 2007. Is responsibility across generations politically feasible? In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. A. Pruchno and M. A. Smyer, 311–31. Baltimore: Johns Hopkins University Press. Bipartisan Commission on Entitlement and Tax Reform. 1995. Bipartisan Commission on Entitlement and Tax Reform: Final report. Washington, DC: GPO. Board of Trustees, Federal Old Age and Survivors Insurance and Disability Insurance Trust Funds. 2007. 2007 annual report of the Board of Trustees of the Federal Old Age and Survivors Insurance and Disability Insurance trust funds. Washington, DC: GPO. Borden, K. 1995. Dismantling the pyramid: The why and how of privatizing Social Security. Cato Project on Social Security Privatization SSP No. 1. Washington, DC: Cato Institute. Butler, S., and P. Germanis. 1983. Achieving Social Security reform: A Leninist strategy. Cato Journal 3:547–56. Chakravarty, S. N., and K. Weisman. 1988. Consuming our children. Forbes, November 14, 222–32.

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Clark, R. L. 1990. Income maintenance policies in the United States. In Handbook of Aging and the Social Sciences (3rd ed.), ed. R. H. Binstock and L. K. George, 382–97. San Diego: Academic Press. Concord Coalition. 1993. The zero deficit plan. Washington, DC: Concord Coalition. Congressional Budget Office. 2001. Social Security: A primer. Washington, DC: GPO. ———. 2004. The budget and economic outlook: Fiscal years 2005 to 2014. Washington, DC: Congressional Budget Office. Crown, W. 2001. Economic status of the elderly. In Handbook of aging and the social sciences (5th ed.), ed. R. H. Binstock and L. K. George, 352–68. San Diego: Academic Press. DeNavas-Walt, C., B. D. Proctor, and C. Hill Lee. 2006. Income, poverty, and health insurance coverage in the United States: 2005. U.S. Census Bureau, Current Population Reports, P60-231. Washington, DC: GPO. Available at http://www. census.gov/prod/2006pubs/p60-231.pdf. Diamond, P., and P. Orszag. 2004. Saving Social Security: A balanced approach. Washington, DC: Brookings Institution Press. Estes, C. L. 2004. Social Security privatization and older women: A feminist political economy perspective. Journal of Aging Studies 18:9–26. Farlie, H. 1988. Talkin’ ’bout my generation. New Republic 198:19–22. Ferrara, P. J. 1985. Social Security and the super IRA: A populist proposal. In Social Security: Prospects for real reform, ed. P. Ferrara, 193–220. Washington, DC: Cato Institute. Ferrara, P. J., and M. Tanner. 1998. A new deal for Social Security. Washington, DC: Cato Institute. Foner, A. 2000. Age integration or age conflict as society ages? Gerontologist 40:272–76. Gamson, W. A. 1992. Talking politics. New York: Cambridge University Press. Ginn, J., and S. Arber. 2000. Gender, the generational contract and pension privatization. In The myth of generational conflict: The family and state in ageing societies, ed. S. Arber and C. Attian-Donfut, 133–53. London: Routledge. Hewitt, P. S. 2007. A conflict of generational interests. Together 12 (2): 4, 27. Howe, H., and P. Longman. 1992. The next new deal. Atlantic Monthly, April, 88–99. Kingson, E. R. 2007. Generations at war: The sequel. Together 14 (2): 5–6. Kingson, E. R., B. A. Hirshorn, and J. M. Cornman. 1986. Ties that bind. Washington, DC: Seven Locks Press. Kingson, E. R., and J. H. Schulz. 1997. Should Social Security be means-tested? In Social Security in the 21st century, ed. E. R. Kingson and J. H. Schulz, 41–61. New York: Oxford University Press. Kingson, E. R., and J. B. Williamson. 1993. The generational equity debate: A progressive framing of a conservative issue. Journal of Aging and Social Policy 5:31–53. ———. 2001. Economic security policies. In Handbook of aging and the social sciences (5th ed.), ed. R. H. Binstock and L. K. George, 369–86. San Diego: Academic Press. Kohli, M. 2006. Aging and justice. In Handbook of Aging and the Social Sciences (6th ed.), ed. R. H. Binstock and L. K. George, 456–78. San Diego: Academic Press. Kotlikoff, L. J. 1992. Generational accounting: Knowing who pays, and when, for what we spend. New York: Free Press.

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Kotlikoff, L. J., and S. Burns. 2004. The coming generational storm: What you need to know about America’s economic future. Boston: MIT Press. Kuttner, R. 1980. The revolt of the haves: Tax rebellions and hard times. New York: Simon & Schuster. ———. 1982. The Social Security hysteria. New Republic, December 27, 17–21. Lakoff, G. 2004. Don’t think of an elephant! White River Junction, VT: Chelsea Green. Lamm, R. D. 2007. Crime of the century. July 13. Retrieved March 1, 2008, from www.age-usa.org/articles/ Longman, P. 1982. Taking America to the cleaners. Washington Monthly, November, 25–30. ———. 1985. Justice between generations. Atlantic Monthly, June, 73–81. ———. 1989. Elderly, affluent—and selfish. New York Times. October 10. Marmor, T. R., F. L. Cook, and S. Scher. 1999. Social Security and the politics of generational conflict. In The generational equity debate, ed. J. B. Williamson, E. R. Kingson, and D. M. Watts-Roy, 185–203. New York: Columbia University Press. Minkler, M. 1991. ‘‘Generational equity’’ and the new victim blaming. In Critical perspectives in aging, ed. M. Minkler and C. Estes, 67–79. Amityville, NY: Baywood Press. Moody, H. R. 1992. Ethics in an aging society. Baltimore: Johns Hopkins University Press. Munnell, A. H. 2001. Individual accounts versus social insurance: A United States perspective. In Building Social Security: The challenge of privatization, ed. X. Scheil-Adlung, 63–82. New Brunswick, NJ: Transaction. Myles, J. 2002. A new social contract for the elderly? In Why we need a new welfare state, ed. G. Esping-Andersen, 130–72. Oxford: Oxford University Press. Peterson, P. G. 1996. Will America grow up before it grows old? New York: Random House. ———. 1999. How will America pay for the retirement of the baby boom generation? In The generational equity debate, ed. J. B. Williamson, E. R. Kingson, and D. M. Watts-Roy, 41–57. New York: Columbia University Press. Powell L. A., J. B. Williamson, and K. Branco. 1996. The senior rights movement: Framing the policy debate in America. New York: Twayne. President’s Commission to Strengthen Social Security. 2001. Strengthening Social Security and creating personal wealth for all Americans: Report of the President’s Commission. Available at http://www.csss.gov/reports/Final_report.pdf. Preston, S. H. 1984. Children and the elderly: Divergent paths for America’s dependents. Demography 21:81–86. Quadagno, J. S. 1989. Generational equity and the politics of the welfare state. Politics and Society 17:353–76. ———. 1996. Social security and the myth of the entitlement ‘‘crisis.’’ Gerontologist 36:391–99. Rosenbaum, W. A., and J. W. Button. 1989. Is there a gray peril? Retirement politics in Florida. Gerontologist 29:300–306. Rother, J. 2007. Beyond intergenerational conflict. Together 12 (2): 5, 12. Rubinstein, R. L. 1993. Cultural frameworks and values in intergenerational justice. In Justice across generations: What does it mean? ed. L. M. Cohen, 139–52. Washington, DC: American Association of Retired Persons. Saluter, A. F. 1996. Marital status and living arrangements: March 1994. In Current population reports (Series P-20, no. 484). Washington, DC: U.S. Department of Commerce, Bureau of the Census.

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Schor, J. 2004. Older consumers and the ecological dilemma. Harvard Generations Policy Journal 1 (Winter): 79–90. Silverstein, M., T. M. Parrott, J. J. Angelelli, and F. L. Cook. 2000. Solidarity and tension between age groups in the United States: Challenge for an aging America in the 21st century. International Journal of Social Welfare 9:270–84. Svihula, J., and C. L. Estes. 2007. Social Security politics: Ideology and reform. Journal of Gerontology: Social Sciences 62B (2): S79–S89. Szinovacz, M. E. 2003. Contexts and pathways: Retirement as institution, process and experience. In Retirement: Reasons, process and results, ed. G. A. Adams and T. A. Beehr, 6–52. New York: Springer. U.S. Census Bureau. 2006. Income, poverty, and health insurance coverage in the United States: 2005. Current Population Reports, P60-231. Retrieved February 25, 2008 from www.census.gov/rod/2006pubs/p60-231.pdf. White, J. 2001. False alarm. Baltimore: Johns Hopkins University Press. Williamson, J. B. 1997. A critique of the case for privatizing Social Security. Gerontologist 37:561–71. ———. 2004. Assessing the pension reform potential of a notional defined contribution pillar. International Social Security Review 57 (1): 47–64. ———. 2007. Social Security reform and responsibility across the generations: Framing the debate. In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. A. Pruchno and M. A. Smyer, 311–31. Baltimore: Johns Hopkins University Press. Williamson, J. B., T. K. McNamara, and S. A. Howling. 2003. Generational equity, generational interdependence, and the framing of the debate over social security reform. Journal of Sociology & Social Welfare 30:3–14. Williamson, J. B., and S. E. Rix. 2000. Social Security reform: Implications for women. Journal of Aging & Social Policy 11:41–68. Williamson, J. B., and D. M. Watts-Roy. 1999. Framing the generational equity debate. In The generational equity debate, ed. J. B. Williamson, E. R. Kingson, and D. M. Watts-Roy, 3–37. New York: Columbia University Press.

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IV BOOMERS AND PUBLIC POLICY

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10

Population Aging, Entitlement Growth, and the Economy JOHN GIST

T

he aging of the baby-boom generation and increasing longevity will, in the view of many experts, not only transform the demographic composition of the U.S. population but also cause federal spending and budget deficits to rise rapidly, driving up federal debt at a rate beyond our capacity to sustain it. In the worst-case scenario, the United States would be like a family living on credit cards and paying off debt with one card while running up spending faster with another, with insufficient income to ever pay down or get control of its debt. This growing debt, if not checked or reversed, would absorb available capital to pay debt service rather than be used for investment, stifling economic growth. Projections by the Congressional Budget Office (CBO) of gross domestic product (GDP) growth over the forty-four years from 2006 to 2050 average only 2.2 percent per year, compared with 3.4 percent over the forty-four years 1962–2006. To illustrate the significance of the difference, in fifty years the lower growth rate would triple the size of the economy, but the higher rate would quintuple it. A stagnant economy would also affect the standard of living of American families. As overall economic growth slows, family income growth would be ratcheted down as well. The income stagnation that middle-class families have experienced in recent years would likely become routine, and families would face the additional burdens of reductions in employer-arranged benefits,

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increased private health insurance premiums, and increased taxes and Medicare premiums intended to offset the effects of rising deficits. In this chapter, I examine the role of population aging in our long-term budgetary problems. The first section discusses entitlements and their historical and projected growth patterns, and the following section shows that aging plays only a minor role in the growth of entitlement programs. I then review some of the beneficial effects of entitlement spending and compare spending entitlement programs with tax programs that confer similar entitlement benefits on their beneficiaries. The last two sections discuss several factors that may mitigate future budgetary pressures and offer a plausible scenario for addressing future budgetary challenges. WHAT ARE ENTITLEMENTS? The term entitlements is shorthand for a category of benefits defined in the Congressional Budget Reform and Impoundment Control Act of 1974 that are conferred directly by legislation on any person or unit of government that meets the eligibility requirements established by such legislation.1 In budgetary terms, entitlements are programs that generally carry permanent authorizations and are not subject to annual appropriations, thereby insulating them from congressional appropriations scrutiny. Although there are more than four hundred entitlements (General Accounting Office 1994), they are often thought of as synonymous with the three largest of those programs—Social Security, Medicare, and Medicaid—because the three compose more than 75 percent of entitlement outlays. The measure most often used to gauge the size of entitlement spending is its ratio to GDP, the total output of the economy. This measure provides a rough index of the burden of entitlement spending on the overall economy. Figure 10-1 shows the ratio of total entitlement spending and the three largest entitlement programs (Social Security, Medicare, and Medicaid) to GDP from 1962 to the present and projected out to 2050.2 Numerous experts have characterized entitlement growth as ‘‘unsustainable.’’ The CBO has provided a succinct definition for sustainability: ‘‘[F]or any path of spending and revenues to be sustainable, the resulting debt must eventually grow no faster than the economy’’—that is, debt must represent a constant or declining ratio to GDP (CBO 1998). Although entitlement spending has grown faster than GDP when measured over the past four decades (5 percent vs. 3.5 percent), the difference is entirely attributable to a period of growth in spending from 1967 through 1983 that was spurred by new programs, expansions of existing programs, and three recessions. During that period, entitlement spending increased more than twice as fast as GDP (7 percent vs. 2.8 percent) and doubled as a share of GDP, at a time when two oil shocks, a deep recession, and recordhigh interest rates were roiling the U.S. economy.

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FIGURE 10-1. Spending for Largest Three Entitlements and All Other Noninterest Spending as a Percentage of GDP, 1962–2050 Source: CBO 2005, Supplemental Data (Intermediate projections)

Since its high point in 1983, however, entitlement spending has been a picture of stability, growing at virtually the same rate as the economy (3.37 vs. 3.31 percent). It has also shown a slight countercyclical pattern, increasing during every economic recession in the past thirty years (1973–75, 1980–82, and 1990–91) and declining relative to GDP in every economic expansion over the same period (see figure 10-2). The lines in figure 10-2 generally move in opposite directions, except for the 1999–2004 period. Compared with the more volatile 1970s, this countercyclical pattern has become more muted in recent years, but it illustrates that sustained and strong economic expansions are still contributing factors to containing entitlement spending—they slow the rate of growth of populations in need and they cause income tax revenue, due to graduated rates, to grow faster than the economy. The past stability of entitlement spending may be at an end, however, judging from CBO projections. In this chapter, I use CBO’s ‘‘mandatory spending’’ budget category as synonymous with entitlement spending, which it virtually is. This category excludes another item of required spending in the budget—net interest payments. Net interest is not typically considered an entitlement because it is not a benefit program.3 I follow the CBO practice and do not treat net interest as an entitlement in this analysis. Some entitlements are ‘‘non-means-tested,’’ meaning there are income or wealth tests to determine who is eligible for benefits. These include Social Security, Medicare, unemployment insurance, and civilian and military

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FIGURE 10-2.

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Annual Percent Change in Entitlement Spending and GDP, 1962–2016

Source: CBO 2006, appendix F, Historical Budget Data

retirement programs, which all provide benefits based on work histories rather than need. Means-tested entitlements include Supplemental Security Income (SSI), food stamps, Medicaid, and many smaller programs. Nonmeans-tested programs are more than three times as large as means-tested benefits, and the difference is likely to increase in future years with the growth in Social Security and Medicare. Besides these familiar spending programs, entitlements also include the outlay portion of the Earned Income and Child Tax credits. Although these are tax provisions, they result in direct spending because they are ‘‘refundable’’ credits. If a tax filer’s credit exceeds his or her income tax liability, the Internal Revenue Service pays a cash refund. The refundable amount is the entitlement outlay. In truth, however, the entire amount of the tax reduction, not just the direct outlay, represents a benefit to the taxpayer, so it is conceptually equivalent to an entitlement. In the language of tax policy, these are commonly known as ‘‘tax expenditures,’’4 and they bear a striking resemblance to spending entitlements. Like spending entitlements, they confer direct benefits automatically under the law to those individuals who meet the legal requirements without any advance appropriation, and they have the same effect on the budget deficit as spending programs do.5 We will return to these tax provisions later in the chapter. WHAT DRIVES ENTITLEMENT SPENDING? Demographic aging is not a sufficient explanation for the projected future growth in entitlement spending. If it were, we ought to see similarities in the projected growth of those programs that primarily target older

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Americans—namely, Social Security and Medicare.6 Instead, there are very distinct differences in the past and future growth patterns of these two social insurance programs, which illustrates that demography as an explanation misses much of the story. Differences in Entitlement Growth Rates As figure 10-3 shows, different types of entitlements have had very different growth histories and will have very different growth futures. Retirement programs—Social Security and federal civilian and military pensions—have had a far more stable pattern than federal health spending, which is dominated by Medicare and Medicaid.7 A third ‘‘safety net’’ category consists of mostly means-tested programs. This category includes those entitlements—such as SSI, food stamps, and unemployment compensation—that are targeted at individuals who are in economic need. We place all other entitlements into a residual category. Health spending is the only category of entitlement spending that has grown without interruption, a virtually unbroken string of increases in health spending over forty years, with one notable exception in the last three years of the Clinton administration. Retirement spending, which peaked at 6.1 percent of GDP in 1983, has since drifted down to 5.5 percent and is projected to reach only 5.7 percent of GDP in 2016, eight years after the first boomer receives early Social Security benefits. Safety net spending has fluctuated between 1 and 2 percent of GDP, after peaking in 1976 at 2.3 percent of GDP. It has since declined slowly to about 1.5 percent today and is

FIGURE 10-3. Types of Entitlements as a Percentage of GDP, 1962–2016 Source: CBO 2006, appendix F, Historical Budget Data

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projected to decline further by 2016. ‘‘Other’’ entitlement spending has never exceeded 1 percent of GDP, and it is projected to be 0.3 percent in 2016. The CBO projects Social Security, Medicare, and Medicaid separately to 2050 based on size of beneficiary populations and average per-capita cost. It forecasts that Social Security will drift upward from about 4 percent to about 6 percent of GDP between 2010 and 2030, then remain virtually flat, whereas the health spending share will continue its rise, reaching roughly double the size of Social Security by 2050. Social Security’s growth ‘‘bump’’ from 2010 to 2035 is due almost entirely to the retirement of the boomer cohort, while the steep health spending trajectory is largely due to nondemographic factors, especially medical technology. Is Aging the Cause of Increases in Health Entitlements? If health spending is the primary driver of past and future total entitlement spending, does aging explain that growth?8 According to estimates from the CBO, Medicare cost growth is not primarily due to population aging but rather to other factors. The CBO has estimated that about one-sixth of Medicare’s cost growth since 1970 was due to increases in the size of the older population, with the rest attributed to other causes (see figure 10-4). Other studies have demonstrated that lifetime health care costs are not much different for Americans with average life expectancies than for those with much longer life spans (Lubitz et al. 1995, 2003; Spillman and Lubitz 2000; Joyce et al. 2005). Elderly persons in better health have longer life

FIGURE 10-4. Effect of Aging and Excess Cost Growth on Medicare and Medicaid Spending, 2007–2082 Source: CBO 2007, supplementary data

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expectancies than those in poorer health, but they have similar cumulative health care expenditures until death for those health services that are covered by Medicare (Lubitz et al. 2003). Medicare expenditures will be affected much more by the absolute increase in the numbers of the elderly, which will surge between 2010 and 2030, than by longevity increases. On the other hand, nursing home care costs (which, for the most part, are not covered by Medicare) and to a smaller extent home care costs climb steeply with advanced age. These costs mainly affect the Medicaid program (see below). Is the Rise in National Health Spending Due to Health Entitlements? Although health spending across the board has proven difficult to restrain, Medicare spending overall has been contained more effectively than has private-sector health spending for decades. Medicare has actually led the nation in the effort to control health care costs through innovations in reimbursement for hospitals and physicians. These innovations, which have been copied by many private-sector insurers, have proven effective, as seen in the differences in the rates of growth of public and private health care costs over the past three decades (Boccuti and Moon 2003) (see figure 10-5 below).

FIGURE 10-5. Average Annual Change in Per-Enrollee Medicare Spending and Private Health Insurance Premiums (for Common Benefits), 1969–2004 Note: Annual change is calculated from previous year. ‘‘Common benefits’’ refers to benefits commonly covered by Medicare and private health insurance: hospital services, physician and clinical services, other professional services, and durable medical products. Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, table 13, http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf.

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As a federal-state program, Medicaid has much greater spending variation than Medicare because it pays for health care for a variety of low-income persons. The average growth in costs per Medicaid beneficiary was highest among aged beneficiaries between 1975 and 2002 (5.3 percent per year) (see figure 10-6). Yet because the growth rate in the number of aged beneficiaries was far below that of any other beneficiary group (0.3 percent per year between 1975 and 2002), the growth in the total cost of aged Medicaid beneficiaries was below that of both disabled and child beneficiaries, and only slightly higher than that for adult beneficiaries. Aged beneficiaries accounted for 37 percent of all Medicaid program expenditures in 1975, but by 2002 that share had dipped to 25 percent (Boccuti and Moon 2003, 8, table 2). The consensus among health experts is that a small number of factors accounts for the bulk of the increases in health spending. The most important of these is technological change, which affects both the public and private health sectors. As the CBO has noted, ‘‘In the health care field, unlike in many sectors of the economy, technological advances have generally raised costs rather than lowered them’’ (2005, 6). Another factor is the use or intensity of services, and a third is the sharp increases in the cost of prescription drugs. While they contribute to the growth in the costs of Medicare and Medicaid, these factors also drive up the cost of health care nationally, affecting all payers, both public and private, including individuals, employers, and state and federal governments.

FIGURE 10-6. Average Growth Rates of Medicaid Recipients, Costs per Recipient, and Total Costs by Eligibility Category, Fiscal Years 1975–2002 Source: Congressional Budget Office, ‘‘Medicaid Spending Growth and Options for Controlling Costs,’’ testimony of Donald B. Marron before the Special Committee on Aging, United States Senate, July 13, 2006.

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ECONOMIC AND DISTRIBUTIONAL EFFECTS OF ENTITLEMENTS Entitlement spending programs represent the most visible part of our nation’s social welfare system. The ‘‘big three’’ entitlement programs have had significant impacts on the economic and health status of older Americans. Social Security has brought about sharp decreases in elderly poverty since the early 1960s (Beedon and Wu 2005) and has had important impacts on income levels and income inequality, although such comparisons should acknowledge that in the absence of Social Security, people would likely behave quite differently. The incomes of seniors would be less than half as large without social insurance cash transfers (U.S. Bureau of the Census 2006), and these transfers have increased the share of income going to the top three-fifths of the population.9 Social Security has allowed older Americans to have much greater independence than they did a half-century ago (McGarry and Schoeni 1998). Medicare was responsible for bringing health insurance coverage to nearly all older Americans, only a little more than half of whom had coverage in 1963 before Medicare was created (Moon 2000; AARP 2005). The introduction of Medicare has been estimated to reduce by 40 percent the out-of-pocket costs for the quarter of beneficiaries with the highest out-of-pocket costs (Finkelstein and McKnight 2005). Although most Americans are familiar with the part of our social welfare system represented by these spending programs, an entirely distinct and more ‘‘hidden’’ part of our social welfare system operates through the tax code (Howard 1997; Hacker 2002). It provides more than $100 billion for retirement savings and more than $90 billion each for health insurance and the purchase of homes. The tax code contains hundreds of such provisions, including deductions, preferential rates, exclusions from income, and credits against tax liability that confer substantial but far less visible benefits that are for all practical purposes another category of entitlements—‘‘tax entitlements.’’ After the Tax Reform Act of 1986 took effect, tax entitlements increased as a percentage of total spending entitlements from just over 50 percent in 1988 to nearly 60 percent of spending entitlements today. To put the size of tax entitlements into proper perspective, the total estimated revenue loss from individual tax expenditures was 6.4 percent of GDP in 2006, more than three times the federal budget deficit (Hungerford 2006b).10

Distribution of Spending Entitlements by Income The argument is occasionally heard that spending entitlements should be means-tested, on the grounds that they provide excessive benefits to the affluent. Such arguments are rarely heard about tax benefits. Spending entitlements have contributed to a much-reduced poverty rate and a more equal distribution of income; tax entitlements, with certain obvious exceptions like the Earned Income Credit, have not.

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Direct spending entitlement programs have been well targeted at lowerand middle-income and vulnerable populations, bringing about dramatic changes in economic and social well-being for Americans of all ages. Social Security and Medicare are relatively progressive programs, because younger workers redistribute income toward lower-income retirees. Figure 10-7 shows that the seven largest entitlement spending programs, which total more than three-fourths of all spending entitlement dollars, are fairly evenly distributed by income, with the bottom half and top half each receiving roughly 50 percent of all benefits.11 Distribution of Tax Entitlements by Income Tax entitlement benefits have in some cases also brought about dramatic economic changes, such as high rates of homeownership and broad health insurance coverage. But in marked contrast to spending entitlement programs, tax entitlements disproportionately benefit the highest income classes. Figure 10-8 shows the distribution of nine tax entitlements, including the seven largest, representing more than half of all tax entitlement dollars. Using the same income framework as with spending entitlements, tax entitlements are overwhelmingly concentrated in the top two income deciles, which receive almost two-thirds of all the tax benefits for these nine items. Even those tax entitlements that are fairly widely received, such as the mortgage interest or state and local tax deductions, are highly skewed.

FIGURE 10-7. Cumulative Percent Distribution of Selected Major Spending Entitlements, All Ages, by Income Decile Source: Estimates by Chainbridge Software using its Individual Income Tax Model

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FIGURE 10-8. Cumulative Percent Distribution of Selected Major Tax Entitlements, All Ages, by Income Decile, 2006 Source: Estimates by Chainbridge Software using its Individual Income Tax Model

Nearly 80 percent of mortgage interest deduction benefits go to the top 20 percent of households. An even larger percentage of state and local tax deductions—nearly 90 percent—goes to households in the top 20 percent.12 Distribution of Entitlements by Age Entitlement critics have argued that the benefits of spending entitlements are excessively skewed toward the older population. Tax entitlements are rarely subjected to the same analysis. Figure 10-9 compares the age distribution of the seven spending and nine tax entitlements discussed above. Of all spending entitlements (a total of more than $1.1 trillion included here), about six in ten federal dollars went to the older population, while nearly seven of eight federal tax benefit dollars (of nearly $500 billion included here) went to those under age 65.13 Tax experts might point out that older citizens are less likely to pay income taxes and therefore cannot realize tax benefits, which they would have received as younger workers. But the same can be said of Social Security and Medicare—these benefits are received by older citizens, but they will also enjoy these benefits when they reach eligibility age. Joint Distribution of Spending and Tax Entitlements by Age and Income Figure 10-10 combines the distribution of both spending and tax entitlements by age and income. Overall, about 54 percent of all entitlement dollars are received by the under-65 population, represented by the top two areas.

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Shares of Spending and Tax Entitlements Received, by Age Group, 2006

The 54 percent is divided roughly equally between spending ($450 billion) and tax ($424 billion) entitlements. Only 46 percent of all the entitlement benefits represented in figure 10-10 are received by the 65-and-older population, 42 percent coming from spending and 4 percent from tax entitlements.14 The share of entitlements received by older Americans tends to be more concentrated in the middle of the income distribution. By contrast, the entitlement benefits received by the under-65 age group occur at the two extremes of the income distribution. The low-income group is due to means-tested benefits primarily, whereas the high-income group is mainly due to tax benefits for the affluent. Although this suggests nothing about the individual lifetime distribution of entitlement benefits, collectively these benefits are spread fairly evenly across the life cycle, not concentrated on those in retirement. SOME MITIGATING FACTORS Several factors may warrant a more optimistic perspective on long-term budgetary trends. Future Dependency Ratios Stay below Their 1960s Levels One overlooked factor is that we have had larger dependent populations in our history than we have today or will have in the distant future. Although slow growth in the labor force and rapid growth in the retired population are projected to cause the aged dependency ratio—the ratio of

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FIGURE 10-10. Shares of Combined Spending and Tax Entitlements Received by 65+ and Under 65 Age Groups, by Income Decile (in thousands of 2006 dollars) Source: Estimates by Chainbridge Software using its Individual Income Tax Model.

elderly persons to working-age persons—to rise from 0.203 in 2005 (or about four workers to every elderly person) to 0.431 in 2080 (or slightly more than two workers to every elderly person), the total dependency ratio—the ratio of the retirees plus youth to people of working age—will be lower in 2010 (0.66) than it was in the 1960s (0.95) and will remain below 0.9 through 2080 (Board of Trustees 2005, table V.A.2.) The increasing need to spend on the old is partially offset by the shrinking need to provide for the young through schools. The total dependency ratio reached its peak in the mid-1960s, with nearly one worker for each child or elderly person. It fell steadily from the late 1960s through 2005, and it has not yet bottomed out. By 2010, it is expected to hit its low point and start rising again, although it will not return to its 1965 peak during the seventy-five-year forecast horizon. Even as late as 2080, the ratio is projected to stand at 0.859—lower than it was in 1960 (Board of Trustees 2005, table V.A.2). As noted earlier, the costs of younger dependents are approximately 40 percent those of older dependents (CBO 2000; Cutler et al. 1990). Lengthening Work Lives It is often suggested that it will be necessary to raise the Social Security normal retirement age to make Social Security solvent. Yet important shifts have already taken place in labor force participation rates among older

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workers, and the trends show signs of continuing (see figure 10-11). There has been a perceptible and steady increase over time in the labor force participation of people in their late 50s, 60s, and 70s (Quinn 1999). Labor force participation rose in the late 1990s, undoubtedly in part to the robust economy, but the trend continued during the 2001 recession and after. Previous projections of labor force participation rates for workers age 55 and older (Fullerton 1999) may underestimate the increase (Verma and Rix 2002). Four-fifths of boomers report that they expect to work at least parttime in retirement (AARP 1999), and the age at which people can receive full Social Security benefits is increasing to 67, reducing benefits accordingly and encouraging more people to work longer. Although total Social Security program costs are little affected if people delay Social Security benefit receipt because of actuarial adjustments,15 working longer and opting for later benefits increases monthly Social Security benefit payments and reduces the number of years workers need to cover with their private savings. For example, the oldest boomers will be eligible to receive only 75 percent of their normal Social Security benefit if they apply at age 62 (70 percent for younger boomers), 100 percent if they wait until age 66, and 132 percent if they wait until age 70 (CBO 2004). Working longer also gives a worker fewer years of retirement to finance and more time to accumulate additional savings. Furthermore, it helps the Social Security trust fund by adding payroll tax revenues. A CBO report has shown that a working couple at the median income level could, by working until

FIGURE 10-11. Labor Force Participation Rates of Persons Aged 55 and Older, by Age Group, 1985–2005 Source: U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, 1985– 2005, http://data.bls.gov/PDQ/outside.jsp?survey=ln.

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age 70 rather than retiring at age 62, reduce by 90 percent (from $510,000 to $51,000) the amount of assets they would need at age 62 to produce a desired replacement rate of 80 percent in retirement. Declining Disability Rates A study of changing disability patterns found that the prevalence of disability among older Americans is declining at an accelerating pace (Manton and Gu 2001). Singer and Manton (1998) have argued that if a 1.5 percent annual decline (comparable to 1989–1994 and slower than 1994–1999; see figure 10-12) in chronic disability continued indefinitely, it would substantially bolster the long-term fiscal solvency of both the Medicare and Social Security programs. Since then, that rate of disability decline has not only continued but has accelerated. However, others have suggested that, despite savings from reductions in the prevalence of disability, the increases in technology-driven costs are still likely to exceed those savings (Cutler 2001). Although they did not estimate impacts on the Medicaid program, Manton and Gu (2001) found that the relative decline in nursing home use between 1994 and 1999 was larger (3.5 percent per year) than the decline in disability, suggesting the potential for significant savings in the Medicaid program as well. Nursing home utilization occupancy rates declined by 41 percent between 1973 and 2004 for the 65-and-older population. Health improvements have shrunk the long-term care market directly by reducing the base of people who need care, and they have shrunk the market

FIGURE 10-12. Percentage of Disability Group Estimates, National Long-Term Care Survey, 1982–2004/2005 Source: Manton et al. 2006.

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indirectly by increasing the supply of healthy elderly people who can provide care at home (Lakdawalla and Philipson 2002). MAKING ENTITLEMENTS SUSTAINABLE: POLICY SOLUTIONS A Plausible Future Scenario In the CBO’s long-term budget scenarios, the most important spending factor is the rate of growth of health care costs, and the most important revenue factor is the assumption made regarding congressional action on taxes. The CBO’s intermediate assumption about health care costs was that Medicare and Medicaid would grow in the future by one percentage point faster than the rate of growth of per-capita GDP. This ‘‘excess cost growth’’ assumption is consistent with declining costs for both Medicare and Medicaid since 1970, and evidence that the rate of excess cost growth in Medicare dropped to 0.9 percent from 1992 to 2003 (White 2006). Using the intermediate assumption, the CBO projected that Medicare and Medicaid spending would triple to 12.6 percent of GDP by 2050, that the three largest entitlements would increase from 8.4 percent to 19 percent of GDP by 2050, and that total federal spending would rise by 50 percent, from 20.1 percent to 30 percent of GDP. However, primary spending (i.e., excluding net interest) would rise by somewhat less, from 18.5 percent to 25.3 percent, or by 37 percent. On the revenue side, the CBO’s future revenue scenarios followed one of two simple rules of thumb: (1) continue current law, allowing tax revenues automatically to rise as a percentage of GDP, or (2) hold tax revenues at the same ratio to GDP that they have been for the past thirty years (i.e., about 18.3 percent) via periodic tax cuts. Assuming the former, revenues would grow to 23.7 percent of GDP by 2050.16 Assuming current law revenue policy coupled with intermediate health spending growth would yield a primary deficit (i.e., the gap between revenues and noninterest, or primary, spending) of 1.6 percent of GDP by 2050. This figure is smaller than the primary deficit in the federal budgets of 2003 and 2004, and only slightly higher than the 2005 deficit. This scenario’s revenue, primary spending, and primary and total deficit projections are shown in figure 10-13. This plausible scenario shows that, with health spending restraint comparable to that of the past decade and with a ‘‘hands-off’’ revenue policy17—we can at least approach a solution to our long-term fiscal problem.18 This scenario still does not achieve sustainability, though, because annual deficits would cumulate over time (notice the bottom light line in figure 10-13), resulting in debt levels nearly equal to GDP by 2050 and rising faster than the economy—an unsustainable outcome.19 Additional fiscal actions would be needed to either moderate the rate of spending growth or further boost federal revenues in order to achieve a sustainable debt-to-GDP ratio. Some of those actions are discussed briefly below.

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FIGURE 10-13. Federal Revenues, Primary Spending, and Surpluses/Deficits as a Percentage of GDP under CBO Long-Term Budget Scenarios, 2006–2050 Source: CBO 2005.

Make Social Security Solvent The reforms needed to bring Social Security into long-term actuarial balance are far from radical. To put the funding gap in perspective, between 1967 and 1983, Social Security nearly doubled as a percentage of GDP, from 2.6 percent to 4.9 percent, in fifteen years. By contrast, Social Security will grow by about the same amount (smaller in percentage terms), from 4.2 percent to 6.6 percent of GDP, over the next twenty-five years. Expressed as a percentage of payroll, Social Security’s financing gap is about 1.95 percent of covered payroll over the next seventy-five years. It is unlikely that solvency will be achieved with revenue-only or spending-only solutions. Raising the taxable wage base to 90 percent of covered wages would restore the Old-Age, Survivors, and Disability Insurance (OASDI) taxable wage base to historical levels and close nearly half of the funding gap. Other proposals would bring in additional revenues, such as including all newly hired state and local workers in Social Security. Benefit reductions are also likely. Adjusting the Social Security benefit formula to scale total benefits back while protecting the lowest-income workers and indexing benefits for longevity could achieve sufficient benefit reductions, coupled with the above revenue increases, to achieve solvency. Expand the Federal Revenue Base Although federal revenues have returned to their long-run average relative to GDP after deep tax cuts in 2001 and 2003, the level of federal revenues is

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simply too low to finance our increasing domestic and global commitments. The U.S. federal tax burden is one of the lowest in the industrialized world. Allowing revenues to rise automatically with economic growth would be a simple way to bolster federal revenues, but it would gradually raise effective marginal tax rates on all Americans. Higher tax rates are said to reduce the incentives to work, save, and invest, lowering labor supply and capital investment and threatening economic growth. Despite the theoretical reasoning behind this position, the historical and current evidence for it is weak (Lindert 2004; Hungerford 2006a). The CBO’s examination of two long-term budget scenarios provides further evidence that higher revenues will not seriously damage the economy. Either scenario would achieve long-term growth while roughly balancing revenues and outlays. In one option, balance would be achieved by allowing revenues to rise by 6.2 percent of GDP; in the other, by cutting spending by that amount. The CBO found that the revenue-increase option would result in an economy in 2050 of $31.5 trillion, compared with $32.8 trillion with the lower-spending option. This difference in 2050 represented an annual growth difference of 0.09 percentage points—for example, a rate of 2.91 percent per year rather than 3 percent, which is hardly a doomsday scenario (CBO 2005). Choosing some combination of increased revenues and spending rate reductions would presumably produce an even smaller reduction in future GDP. Increase Personal and National Savings The long-term growth of the economy depends on adequate saving to finance capital investment. The personal saving rate in the United States, as measured by the Federal Reserve’s measure of personal savings in the Flow of Funds Accounts, has steadily declined since the 1980s, dropping below zero for the first time since the 1930s at the end of 2005 and remaining negative in 2006. The structure of savings incentives in the tax code mainly benefits higher-income taxpayers and is poorly designed to increase savings. Tax incentives that target lower-income households, which are most likely to be saving below their desired and optimal levels, are likely to be more efficient. The best way to target those who are in the bottom tier of income is through employerbased salary reduction plans that are structured in ways to take advantage of the inertia and the ‘‘path of least resistance’’ that workers frequently exhibit. Plans that have automatic enrollment as the default option or a mandated contribution rate dedicated to personal retirement saving, an employer (or government) match for those with lower incomes, a moderate-risk default investment portfolio, and sharply limited opportunities for cashing out accounts are more likely to increase saving among lower-income workers. Plans that require employees to opt in, do not offer a match, allow workers to invest too conservatively, and make cash-outs relatively easy are not likely to successfully increase saving (Choi et al. 2001a, 2001b).

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For those fortunate enough to have access to a 401(k) plan through their employer, introducing these automatic features has proven effective as a way to boost participation. For those less fortunate, pending legislative proposals to introduce an ‘‘auto-IRA’’ via payroll deduction would use the same method proven effective with 401(k)s to boost savings among those who have no pension at all. The Saver’s Credit is the only vehicle that targets saving incentives to those with low and moderate income, whose saving is more likely to represent net additions to national saving rather than asset shifting. This provision was recently made permanent by Congress and its income thresholds indexed for inflation. The maximum credit is $1,000, but the average credit actually claimed in tax year 2002 was about $200. The Saver’s Credit could be an even more effective saving incentive if it were expanded and made refundable, so that a greater benefit would flow to lower-income households. Its perverse income phaseout rates could also be modified to avoid creating excessively high effective marginal tax rates on individuals who pass from the lowest income-eligibility category (about twice the poverty line) to the next (Southworth and Gist 2008). Restore Fiscal Discipline Personal saving is not the only saving that counts. Declines in private saving were offset in the 1990s by public saving due mostly to federal budget surpluses. Fiscal experts have said for years that the best way to increase national saving was to eliminate the federal budget deficit. What once seemed impossible—a balanced federal budget—was achieved by 1998, followed by three more surplus years. As recently as 2001, surpluses were forecast to continue into the era of boomers’ retirement, permitting the elimination of the entire public debt by fiscal year 2010. An important step toward rectifying our fiscal shortfalls is to increase our revenue base to a level that is adequate to meet our domestic and global commitments. Federal spending in 2007 was 20.0 percent of GDP, while revenues were at 18.8 percent, a large disparity for a period of economic expansion. Any new spending or tax measure should be weighed against its impact on the deficit. Important and desirable policy changes, such as reform of the individual alternative minimum tax, should be undertaken with the goal that they should not worsen the overall budget deficit. A serious commitment to fiscal discipline requires that we retain the pay-as-you-go (paygo) rules that require equal offsets for any increase in entitlement spending or reduction in taxes. CONCLUSION The ‘‘graying’’ of America has caused alarm among many experts that the future cost of federal health and retirement programs will create huge federal deficits,

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dry up capital for investment, and jeopardize long-term economic growth. Spending entitlements—specifically Social Security, Medicare, and Medicaid— are generally seen as the main factor driving this scenario. But the data show that an aging population actually explains relatively little of the long-term growth in spending. The most important factor is the growth in health care costs, and health spending has been contained even more effectively in the Medicare program than in private health insurance plans. Spending entitlements represent only one portion of our social welfare programs—tax preferences represent nearly another trillion dollars in social welfare benefits. And although critics often claim that older Americans benefit disproportionately from entitlement spending, when tax entitlements and spending entitlements are cumulated, a majority of combined entitlement benefits are actually received by people under age 65. Certain hopeful trends may portend a more sustainable economic future. Older workers have been staying in the labor force longer, a trend that means higher Social Security taxes to improve the system’s finances. In addition, disability rates appear to have declined steadily for the past decade or more, and nursing home utilization rates have also declined. The productivity of workers has surged in recent years and, if sustained, could help offset the future expected decline in the size of the labor force. A plausible long-term scenario suggests that a future ‘‘train wreck’’ can be averted if we are able to maintain the same level of spending restraint in our health programs that we have already achieved in the past decade and we allow revenues to rise automatically without legislating additional tax cuts. In such a scenario, the primary deficit would be no larger in 2050 than it is today. Because debt would still be rising in this scenario, additional policy solutions would be needed to keep debt from growing faster than GDP—making Social Security solvent, increasing federal revenues, boosting national saving, imposing tighter fiscal discipline, and improving control of health care costs. NOTES 1. The Congressional Budget Act defined entitlement authority as ‘‘authority to make payments (including loans and grants), the budget authority for which is not provided for in advance by appropriations Acts, to any person or government if, under the provisions of the law containing such authority, the United States is obligated to make such payments to persons or governments who meet the requirements established by such law’’ (P.L. 93-344, 88 Stat. 297, July 12, 1974). 2. The CBO projects spending for Social Security, Medicare, and Medicaid through 2050 based on growth in beneficiary populations as well as other programmatic assumptions. Other entitlements are simply assumed to grow at the same rate as GDP. 3. Interest on the debt is a contractual agreement and not technically an entitlement, but it should be included in any discussion of budget items not controllable through the normal congressional appropriations process.

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4. Tax expenditures are defined in the Congressional Budget Reform and Impoundment Control Act of 1974 as ‘‘revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability’’ (P.L. 93-344, sec. 3[3]). 5. To quote the congressional Joint Committee on Taxation: ‘‘Special income tax provisions are referred to as tax expenditures because they may be considered to be analogous to direct outlay programs, and the two can be considered as alternative means of accomplishing similar budget policy objectives. Tax expenditures are similar to those direct spending programs that are available as entitlements to those who meet the statutory criteria established for the programs’’ (U.S. Congress, Joint Committee on Taxation 2006, 2). 6. Both programs have a substantial share of beneficiaries who are under 65 but disabled. 7. Medicaid is a federal-state program that pays for health care for certain categories of very low-income people, as well as being the chief source of spending for long-term care services. It could be regarded as the single largest safety net program, but for analytical purposes, we include it with health entitlements. 8. Although Medicare is typically thought of as a program for the population age 65 and older, in 2003 about 14.3 percent of enrollees were under age 65, including 13.9 percent who were eligible for Medicare because of a disability and 0.4 percent who were eligible because they had end-stage renal disease (ESRD). 9. Based on the Current Population Survey’s pretax, post-transfer income definition and not adjusted for family size. When incomes are adjusted for the lower taxes and smaller household size of older households, income differentials are much smaller. Retirement income among U.S. retirees is, with the exception of Social Security, not indexed for inflation. As a consequence, other income categories decline in real terms over the course of retirement in the United States, while Social Security does not (Hungerford 2003). 10. Strictly speaking, tax entitlements are not additive. Each one is estimated separately as though all the others are in place. They interact, and the sum of all tax entitlements would not precisely equal the amount of revenue gained if they were all repealed. However, many experts have added them together to provide a rough approximation of their combined effect (Hungerford 2006b). 11. The estimates were provided by Chainbridge Software, an economic consulting firm. The income definition used to classify individuals starts with adjusted gross income and adds tax-exempt interest, the employer share of Medicare and Social Security payroll taxes, workers’ compensation, and untaxed Social Security benefits. The cutting points for the ten deciles, which are for the entire population, are $7,487 (between the first and second deciles), $17,889, $27,893, $38,298, $49,417, $62,698, $78,493, $99,389, and $138,343. 12. Some experts question whether tax entitlements are really like entitlement spending, arguing that they are not ‘‘exceptions’’ to the ‘‘normal’’ tax code but rather part of lawmakers’ intent, so that the code with all its exceptions should be regarded as the baseline for comparison. That argument would be more persuasive if the special provisions were all part of the original code, but most provisions have not been. Furthermore, because some types of income, such as pension contributions, receive ‘‘consumption tax treatment’’ (taxes deferred until income is consumed), they are explicitly treated

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differently from the way they would be treated under a pure income tax. This preferential treatment suggests that these provisions are exceptions. 13. In this analysis, we have apportioned Social Security, Medicare, and Medicaid benefits to those under age 65 and those aged 65 and older. 14. It is true that a smaller percentage of the population age 65 and older pays income taxes compared with younger age groups, and therefore they have less likelihood of benefiting from tax entitlements. But the reason they do not pay income taxes is that a higher percentage of elderly households have incomes too low to be taxable and therefore are not able to receive tax benefits. 15. Some cost reduction occurs if people die prior to receiving benefits. 16. That scenario would cause revenues to increase due to real bracket creep and to increases in the number of taxpayers subject to the alternative minimum tax (AMT). Although the AMT and real bracket creep reflect the current law baseline, they would entail noticeable tax increases, and a shift in policy to a revenue level substantially higher, at 23.7 percent of GDP, than its previous historic high at 20.9 percent. 17. Some, perhaps many, would dispute whether this is a plausible assumption, but it has the advantage of requiring no congressional action and, as current law, at least of being consistent with the assumptions made about spending. 18. It would also assume retention of the individual AMT, which is a high priority for reform. There is general agreement on the need for reform of the AMT, but given the costliness of repeal or reform, it should be accomplished in a revenue-neutral manner or as near to it as possible. 19. This scenario entails a federal sector that is nearly 40 percent larger than today’s and a federal budget composition that has shifted substantially more to spending on entitlements.

REFERENCES AARP. 1999. Baby boomers envision their retirement: An AARP segmentation analysis. Washington, DC: AARP. ———. 2005. Medicare at 40: Past accomplishments and future challenges. Press release, July 28. Available at http://www.aarp.org/research/press-center/ presscurrentnews/medicare_at_40.html. Beedon, L., and K. Wu. 2005. Women age 65 and older: Their sources of income. Data Digest No. 126. Washington, DC: AARP Public Policy Institute. Available at http://www.aarp.org/research/socialsecurity/benefits/dd126_women.html. Board of Trustees, Federal Old Age and Survivors Insurance and Disability Insurance Trust Funds. 2006. 2006 annual report of the Board of Trustees of the Old Age and Survivors Insurance and Federal Disability Insurance trust funds. Washington, DC: GPO. Available at http://www.ssa.gov/OACT/TR/TR06/tr06.pdf. Boccuti, C., and M. Moon. 2003. Comparing Medicare and private insurers: Growth rates in spending over three decades. Health Affairs 22 (2): 230–37. CBO (Congressional Budget Office). 1998. Long-term budgetary pressures and policy options. Washington, DC: GPO. Available at http://www.cbo.gov/ftpdocs/4xx/ doc492/ltbudg98.pdf. ———. 2000. Federal spending on the elderly and children. Http://www.cbo.gov/ ftpdocs/23xx/doc2300/fsec.pdf.

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———. 2004. Retirement age and the need for saving. Washington, DC: GPO. ———. 2005. The long-term budget outlook. Washington, DC: GPO. Available at http://www.cbo.gov/ftpdocs/69xx/doc6982/12-15-LongTermOutlook.pdf. ———. 2006. The budget and economic outlook, fiscal years 2007 to 2016. Washington, DC: GPO. ———. 2007. The long-term outlook for health care spending. Washington, DC: GPO. Choi, J., D. Laibson, B. Madrian, and A. Metrick. 2001a. Defined contribution pensions: Plan rules, participant decisions, and the path of least resistance. National Bureau of Economic Research (NBER) Working Paper No. 8,655. Washington, DC: NBER. ———. 2001b. For better or for worse: Default effects and 401(k) savings behavior. NBER Working Paper No. 8,651. Washington, DC: NBER. Cutler, D. 2001. Declining disability among the elderly. Health Affairs 20 (6): 11–27. Cutler, D., J. Poterba, L. Sheiner, and L. Summers. 1990. An aging society: Opportunity or challenge? Brookings Papers on Economic Activity 1:1–73. Finkelstein, A., and R. McKnight. 2005. What did Medicare do (and was it worth it?). NBER Working Paper No. 11,609. Washington, DC: NBER. Available at http:// www.nber.org/papers/w11609. Fullerton, H. 1999. Labor force projections to 2008: Steady growth and changing composition. Monthly Labor Review 122 (11): 19–32. General Accounting Office. 1994. Budget policy: Issues in capping mandatory spending. GAO/AIMD-94-155. Washington, DC: GAO. Hacker, J. 2002. The divided welfare state: The battle over public and private social benefits in the United States. Cambridge: Cambridge University Press. Howard, C. 1997. The hidden welfare state: Tax expenditures and social policy in the United States. Princeton, NJ: Princeton University Press. Hungerford, T. 2003. Is there an American way of aging? Income dynamics of the elderly in the United States and Germany. Research on Aging 25 (5): 435–55. ———. 2006a. The effect of government expenditures and revenues on the economy and economic well-being: A cross-national analysis. Congressional Research Service. April 5. ———. 2006b. Tax expenditures: Trends and critiques. Congressional Research Service. September 13. Joyce, G. F., E. B. Keeler, B. Shang, and D. P. Goldman. 2005. The lifetime burden of chronic disease among the elderly. Health Affairs 24, Suppl. 2: W5R18–29. Lakdawalla, D., and T. Philipson. 2002. The rise in old-age longevity and the market for long-term care. American Economic Review 92 (1): 295–306. Lindert, P. 2004. Growing public: Social spending and economic growth since the eighteenth century. Cambridge: Cambridge University Press. Lubitz, J., et al. 1995. Longevity and Medicare expenditures. New England Journal of Medicine 332 (15): 999–1003. ———. 2003. Health, life expectancy, and health care spending among the elderly. New England Journal of Medicine 349 (11): 48–55. Manton et al. 2006. Change in chronic disability from 1982 to 2004/05 as measured by long-term changes in function and health in the U.S. elderly population. Proceedings of the National Academy of Sciences 103 (48): 18374–79. Manton, K., and X. Gu. 2001. Changes in the prevalence of chronic disability in the United States black and nonblack population above age 65 from 1982 to 1999. Proceedings of the National Academy of Sciences 98 (11): 6354–59.

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McGarry, K., and R. Schoeni. 1998. Social Security, economic growth, and the rise in independence of elderly widows in the 20th century. NBER Working Paper No. 6,511. Washington, DC: NBER. Moon, M. 2000. Medicare matters: Building on a record of accomplishments. Health Care Financing Review 22 (1): 9–22. Quinn, J. 1999. Retirement patterns and bridge jobs in the 1990s. Employee Benefit Research Institute (EBRI) Issue Brief No. 206. Washington, DC: EBRI. Singer, B., and K. Manton. 1998. The effects of health changes on projections of health service needs for the elderly population of the United States. Proceedings of the National Academy of Sciences 95 (26): 15618–22. Southworth, L., and J. Gist. 2008. The saver’s credit: What does it do for saving? AARP Public Policy Institute Insight on the Issues No. 1. Spillman, B., and J. Lubitz. 2000. The effect of longevity on spending for acute and long-term care. New England Journal of Medicine 342 (19): 1409–15. U.S. Bureau of the Census. 2006. The effects of government taxes and transfers on income and poverty: 2004. Available at http://www.census.gov/hhes/www/ poverty/effect2004/effectofgovtandt2004.pdf. U.S. Congress. Joint Committee on Taxation. 2006. Estimates of Federal Tax Expenditures for Fiscal Years 2006–2010. Washington, DC: GPO. Verma, S., and S. Rix. 2002. Retirement age and Social Security reform: The macroeconomic effects of working longer. AARP Public Policy Institute Issue Brief No. 59. White, C. 2006. The slowdown in Medicare spending growth. Congressional Budget Office Working Paper 2006-08. Available at http://www.cbo.gov/ftpdocs/74xx/ doc7453/2006-08.pdf.

11

Private Pensions and the Boomers: How Much Is Enough? JACK L. VANDERHEI AND CRAIG COPELAND

T

he approaching retirement of the post–World War II baby-boom generation has increased public scrutiny of whether this cohort is likely to achieve an ‘‘acceptable’’ standard of living in retirement. Unfortunately, there have been several answers to this question, depending on the type of model adopted, income threshold used, sample analyzed, and assumptions chosen. This chapter attempts to sort through some of these variations and assist the reader in formulating an opinion on this important public policy issue. The chapter begins with a brief overview of the major types of retirement plans (e.g., defined benefit vs. defined contribution). Recent statistics with respect to retirement plan participation are then provided, along with a summary of the work effects of retirement plans. At that point, the concept of retirement income adequacy is explored by defining the metric most commonly used (a replacement rate), examining the various economic risks faced by most retirees, and then summarizing recent research into how high the replacement rate needs to be to provide various levels of confidence that the retiree will have ‘‘adequate’’ retirement income for the remainder of his or her life. We then distill years of research on retirement income adequacy for boomers into a series of scenarios. Under the baseline scenario (originally modeled in 2003), we find vast pockets of the overall population of boomers that will be at risk of not having sufficient resources to pay for ‘‘basic’’ retirement expenses with even a 75 percent probability. In the second scenario,

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we attempt to control for a recent phenomenon among many defined benefit plan sponsors: freezing future accruals for new employees and—in some cases—existing employees also. Finally, we focus on a relatively recent plan design development that will be extremely important with respect to the expansion of future retirement wealth among the boomers in the private sector—the 401(k) plan. We show that this plan provides the potential for substantial retirement wealth—for those employees who choose to participate in the plan and make prudent decisions with respect to contribution and investment behavior. Unfortunately, a significant percentage of employees have not maximized the value of this type of retirement plan, and legislation was recently passed (the Pension Protection Act of 2006) to increase the likelihood that 401(k) sponsors would provide plans with certain default provisions (automatic enrollment plans) that would use the employees’ inertia to work in their favor to increase retirement wealth. We conclude the chapter by summarizing recent research that suggests that those 401(k) participants with several years remaining in the workforce (including some of the younger boomers) will likely have significant increases in their retirement income as the 2006 legislation is implemented. RETIREMENT PLAN PARTICIPATION Private pensions are typically provided on a voluntary basis by the employer and are of one of two types: defined benefit or defined contribution. In a defined benefit plan, the employer typically provides a formula that is based on years of participation and/or average compensation. For example, a defined benefit formula might provide that, starting at age 65, an employee will have a nominal annuity provided for the remainder of his or her life equal to 2 percent of average compensation times the number of years of participation. Under this formula, an employee with average compensation of $100,000 and twenty-five years of participation would be entitled to an annual benefit of $50,000 starting at age 65.1 It is important to note that neither investment risk nor longevity risk is borne by the employee under this arrangement. In contrast, a defined contribution plan will typically have a provision under which the employer’s annual contribution to the employee’s account balance is determined. This amount may be supplemented by employee contributions (this may be provided on a pretax or post-tax basis, or a combination of the two, depending on the type of defined contribution plan). Investment income will be generated based on the investments selected for the employee’s account balance and the market return for those investments. There is no specific guarantee with respect to the amount that will be generated by the employee’s retirement age, and in most cases the employee is allowed to determine how much of the remaining balance will be spent each year in retirement (subject to certain tax limitations). In other words, both

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the investment risk and the longevity risk are borne by the employee in this arrangement. Among all baby-boomer workers (45–64 years old) in 2006, approximately 57 percent worked for an employer or union that sponsored a retirement plan (either a defined benefit or defined contribution plan) and nearly 50 percent participated in such a plan (Copeland 2007a). This level surpassed those of younger workers, with those aged 35–44 participating at the next highest rate, 46 percent. Focusing only on wage and salary workers, as the youngest baby boomers have moved into the 45- to 54-year-old age group, the percentage of this age bracket of workers participating in a retirement plan has steadily declined. In 1998, nearly 63 percent of 45- to 54year-old wage and salary workers participated in an employment-based retirement plan. By 2006, this number had declined to 54.0 percent. A smaller decline has occurred in recent years among workers aged 55–64, from 57.7 percent in 2004 to 53.6 percent in 2006. On a family basis, a somewhat different trend emerges. Among families headed by an individual aged 55–64 in 2001, 42.2 percent had a participant in an employment-based retirement plan (Copeland 2006). By 2004, this number had increased 47.1 percent. However, for families headed by younger boomers (ages 45–54), the percentage with a participant decreased from 58.4 percent in 2001 to 56.9 percent in 2004. In 2004, of those families with heads aged 55–64 who were retirement plan participants, 22.6 percent had a defined benefit plan only, 48.9 percent had a defined contribution plan only, and 28.5 percent had both. Furthermore, 74 percent had a 401(k)-type plan. In 1992, more than 40 percent of these retirement plan participant families had a defined benefit plan only, with approximately 25 percent having both a defined benefit and defined contribution plan. The 401(k)-type plan participation rate for baby-boomer family heads has been in the 75–85 percent range, with heads aged 45–54 having a participation rate of nearly 77 percent and those aged 55–64 at 85 percent in 2004 (Copeland 2006). While the participation rates held relatively steady from 1992 to 2004, the percentage of those who were eligible to participate but did not and who also had a defined benefit plan plummeted. In 1992, 60.3 percent of 55- to 64-year-old family heads who were eligible but chose not to participate in a defined contribution plan participated in a defined benefit plan; by 2004, this number had dropped to 24.4 percent. Consequently, boomers are rapidly approaching retirement with a lower likelihood of being retirement plan participants than that of the immediately preceding generation of retirees. Those who were retirement plan participants were more likely to have a defined contribution plan only. Furthermore, while participation rates among those in the 45–64 age bracket have held steady as the baby-boom generation reached those ages, the percentage eligible to participate but are not doing so who have a defined benefit plan declined dramatically. Therefore, if boomers are not taking advantage of an

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offered defined contribution plan, then they are not likely to have any retirement savings through an employer.

WORK EFFECTS The benefits available to boomers will influence their decision to remain in the workforce into later ages. The availability of health insurance for retirees has been on the decline, and among those who have it, a significant number are being required to contribute a larger share of the costs. Therefore, the lack of access to health insurance will lead some boomers to remain in the workforce. However, as shown above, a larger proportion of boomers will have only a defined contribution plan, which will also have the effect of keeping workers in the workforce longer, either to continue to build up their account balance or to delay tapping into the account. These two factors will force boomers to remain in the workforce, particularly as they become aware, or are already aware, that they have not prepared well enough for retirement and/or will not have access to affordable health care insurance. The trend toward a higher percentage of individuals age 55 or older being in the labor force has been established, as the oldest baby boomers are becoming a large proportion of that group. In 1993, 29.4 percent of Americans 55 or older were in the labor force. This grew to 38.0 percent by 2006 (Copeland 2007c). Not only are a larger percentage of workers that age in the labor force, but of those working, the percentage working full-time yearround also significantly increased, from 54.5 percent in 1990 to 65.5 percent in 2006 (Copeland 2007b). This increase in full-time, full-year work was at the expense of part-year workers, as the part-time, full-year workers’ percentage over this same time remained flat. Furthermore, the trend of more older workers in the labor force is projected to continue, with the group of workers age 55 or over expected to increase by almost 50 percent by 2016, making up nearly one-quarter of the workforce, compared with 17 percent in 2006 (Toossi 2007). Consequently, more boomers will be in the workforce into older ages than previous generations—increasingly out of necessity, not choice.

WHAT IS RETIREMENT INCOME ADEQUACY? A traditional way of determining retirement income adequacy in a relatively easy-to-understand number is the replacement rate. This attempts to quantify the gross retirement income that must be received as a percentage of the employee’s gross income prior to retirement in order to provide the same after-tax income, after adjusting for differences in savings, age, and workrelated expenditures in the two periods (VanDerhei 2004).

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While the concept of a replacement rate remains the standard for assessing retirement income adequacy, it does suffer from some well-known limitations, especially as defined contribution plans become a larger proportion of employees’ retirement wealth and the likelihood of the traditional type of employer-provided retiree health coverage continues to decrease. Recently, a new generation of retirement models has been developed to include such crucial factors as longevity, investment, and health care risk into their retirement planning process. The huge variation in the range of replacement rate targets—depending on the individual’s income, the degree of annuitization for initial retirement wealth, and the asset allocation of the postretirement investments—calls into question whether a single rule-of-thumb measure is realistic to use in the retirement planning process. Given the wide differences in individual circumstances (such as age, health, and income) and the complexity of retirement risks that need to be dealt with—such as longevity (addressed through annuitization of assets), old-age infirmity (addressed through long-term care insurance), and asset preservation (addressed through investment allocation)—a simple one-size-fits-all replacement rate will not work for most Americans. The results published in VanDerhei 2006 show the sobering (if not staggering) amounts of money needed to provide a reasonably high chance of being able to afford retirement if the retiree self-insures one or more of the three key risks of retirement planning (investment risk; longevity risk; and the risk of catastrophic retiree health costs, including nursing home costs). However, the results also show the positive impact that can be obtained by annuitizing assets in retirement to protect against the risk of longevity. In this regard, the model points not only to a more realistic size of the retirement income problem but also to ways that individuals can begin to deal with it. How much of a difference will this process make in the initial determination of a target replacement rate? If it is assumed that there is no equity allocation of assets nor is any of the initial retirement wealth annuitized, a stylized highincome male would need a 52 percent replacement rate in order to have a 50 percent chance of covering his retirement expenses if he retires at age 65. If he is not comfortable with a 50–50 prospect of ‘‘running out’’ of retirement income, he could increase his chances of success to 75 percent by raising his income replacement rate to 78 percent; if he wants a 90 percent chance of success, he would have to raise his replacement rate to 119 percent.2 What would it mean if this high-income male took early retirement as soon as he is eligible for Social Security (at age 62)? The replacement rates jump considerably: For a 50–50 chance of success, his income replacement rate would be 64 percent; for a 75 percent chance of success, 97 percent; and for a 90 percent chance, 149 percent. If, on the other hand, he decides to delay retirement until age 68, he can decrease the figures to 43, 66, and 97 percent, respectively.

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WILL THE BOOMERS HAVE SUFFICIENT RETIREMENT INCOME? BASELINE RESULTS Whether a significant percentage of boomers will be able to accumulate sufficient retirement wealth to achieve these replacement rate targets is a question that requires separate modeling. In VanDerhei and Copeland 2003, we combined simulated retirement income and wealth with simulated retiree expenditures to determine how much each family unit would need to save today (as a percentage of their current wages) to maintain a prespecified ‘‘comfort level’’ (i.e., confidence level) that they will be able to afford the simulated expenses for the remainder of the lifetime of the family unit (i.e., death of second spouse in a family).3 Below, we report these savings rates by age cohort, family status (at retirement), and gender. Six five-year birth cohorts were simulated. The oldest group was born in the period 1936 to 1940, inclusive, while the youngest group was born in 1961 to 1965, inclusive. Three combinations of gender/family status at retirement are reported: family, single male, and single female. In addition, the relative income is reported by estimating lifetime income quartiles (from 2002 though retirement age) for each of the eighteen combinations of birth cohort and gender/family status at retirement. It is important to note that within each of the groups modeled there will undoubtedly be significant percentages in the zero category as well as those at levels beyond which anyone could reasonably assume more than a de minimis number of individuals could possibly save. We account for these situations in two ways. First, we report medians for each of the groups. In other words, the numbers presented in the first two charts represent the estimate for the 75th and 90th percentiles, respectively, when ranked by percentage of compensation. Second, we limit the reported values to 25 percent of compensation, under the assumption that few, if any, family units would be able to contribute in excess of this percentage on a continuous basis until retirement age. It is also important to note that these percentages merely represent savings that need to be generated in addition to what retirement income and/or wealth is simulated by the model. Therefore, if the family unit is already generating savings for retirement that is not included in defined benefit or defined contribution plans, individual retirement accounts (IRAs), Social Security, and/or net housing equity, that value needs to be deducted from the estimated percentages. Figure 11-1 shows the median percentage of compensation that must be saved each year until retirement for a 75 percent confidence level when combined with simulated retirement wealth, assuming current Social Security benefits and assuming that housing equity is never liquidated. For example, all gender/family combinations in the first two income quartiles for the oldest birth cohort are at the 25 percent of compensation threshold. For those in the highest income quartile for this birth cohort, the percentages of compensation

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FIGURE 11-1. Percentage of Added Compensation That Must Be Saved Annually Until Retirement for a 75% Chance of Covering Basic Retirement Expenses (assumes current Social Security and housing equity is never liquidated) Source: EBRI-ERF Retirement Security Projection Model.

needed to be saved are 23.8 percent for single females, 13.9 percent for single males, and 6.1 percent for families. Figure 11-2 shows the additional savings required to provide retirement adequacy in nine out of ten simulated life paths. In this case, nearly all of the combinations of gender/family status at retirement for the first three income quartiles are at the threshold (the median for families in the third quartile is estimated at 24.8 percent of compensation). Those in the highest income quartile of this birth cohort all have requirements that would prove difficult if not impossible to implement: single females are estimated to now need to save more than 25 percent of compensation, single males 22.1 percent of compensation, and families 10.1 percent of compensation. Given that most individuals would be unlikely to choose a situation that would provide them with adequate retirement income only 50 percent of the time, this analysis focuses on the 75 percent and 90 percent confidence levels. We have purposely structured many of our assumptions to provide conservative estimates of the amounts that would be needed to be saved while employees are working to alleviate any deficits. For example, we have assumed in this version of the model that all employees continue to work until age 65, even though there has been a long-term trend toward earlier retirement (albeit one that seems to be reversing in recent years). We have also assumed that individual account balances are ‘‘self-annuitized’’ over a period of time that expands the individual and/or family life expectancy by five years, even though there appears to be limited evidence that this type of buffer is actually contemplated by retirees as a risk-reduction device.

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FIGURE 11-2. Percentage of Added Compensation That Must Be Saved Annually Until Retirement for a 90% Chance of Covering Basic Retirement Expenses (assumes current Social Security and housing equity is never liquidated) Source: EBRI-ERF Retirement Security Projection Model.

Even with these conservative biases built in, the numbers appear troubling for some age cohorts and almost fatalistic for others. The good news is that if many of the younger cohorts begin saving a reasonable amount to supplement their Social Security and qualified retirement plans now, they have a good chance of providing themselves with reasonable assurance that they will at least be able to cover basic retirement expenditures. However, changes in public policy and additional resources from families and charities would be required to provide adequate retirement income for retirees with greater longevity who suffer serious and persistent chronic disease.4 HOW WILL DEFINED BENEFIT PLAN FREEZES IMPACT RETIREMENT INCOME ADEQUACY? Although the analysis described in the previous section assumed that employers will continue to provide defined benefit coverage at the same rates that were provided at the time the model was constructed (2003), there have been major changes in recent years with respect to the likelihood that workers will be covered by defined benefit plans in the future. The dawn of the new year in 2006 began with a flood of news reports about the supposedly new trend among private defined benefit plan sponsors of ‘‘freezing’’ their pension plans for current or new workers. In reality, these decisions have been quite prevalent in recent years and are part of the well-documented and long-term decline of ‘‘traditional’’ pension plans;

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what’s unusual is the large size of some of the employers that have recently announced pension freezes and the frequency of the announcements. While it is obvious that pension plan freezes affect some workers negatively, it is not obvious which workers are affected nor to what degree they are affected by a pension freeze. There are many reasons for this, most importantly the unique characteristics and terms of each pension plan and each freeze, along with the age and characteristics of the workers. This section summarizes how pension freezes are likely to impact existing employees as a function of plan type and employee demographics. However, a detailed analysis of how this trend will impact retirement income adequacy must wait for additional data on the number of plan sponsors undertaking this activity, as well as information on the amount of additional employer contributions that tend to be provided as a quid pro quo for the termination of additional accruals for the defined benefit plan. Although it is too early to quantify the expected impact of this trend on retirement income adequacy, it is possible to model the additional employer contribution (expressed as a percentage of employee compensation) that would need to be provided to the employee subjected to a pension freeze to indemnify him or her in an expected-value sense for the reduction in defined benefit accruals. This additional amount is referred to as the indemnification contribution rate. If the employer increases the amounts contributed to the defined contribution plan by at least this amount, the employee is not likely to suffer with respect to retirement income adequacy. If the employer provides an increase to the defined contribution plan of less than this amount, the employee is likely to end up with less retirement income unless he or she chooses to make up the differential through increased contributions. The amount needed to indemnify the employee will obviously depend on a number of factors. Besides the key assumptions of future rates of return on various asset classes and future salary growth, the indemnification contribution rate will depend upon: • The type of defined benefit plan that was previously sponsored. Final-average plans5 (and to a lesser extent, career-average plans) tend to grow faster toward the end of the employee’s active working career than the other plan types and (all else being equal) should have a larger indemnification contribution rate for older and/or longer-tenured employees; the bigger the potential pension benefit, the more would have to be made up through defined contribution plan contributions. Cash-balance pension plans6 tend to accumulate benefits in a fashion that is similar to defined contribution plans, and the indemnification contribution rate will be determined by the relative size of the cash-balance pay credits and the spread between the assumed interest credit for the cash-balance plans and the assumed rate of return for the 401(k) plans. • Generosity parameters of the defined benefit plan. Within any plan type, there are a variety of plan design considerations that may make the plan more or

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less valuable to the employee. For example, one plan may provide 1 percent of final-average, three-year compensation, while another might provide 2 percent. Alternatively, the averaging period might have been five years, or the plan benefits might have been integrated with Social Security. As described above, the higher the relative value of the defined benefit pension plan, the higher the indemnification contribution rate.

The additional contribution needed from the employer to financially indemnify the employee for the loss in expected retirement benefits as a result of the defined benefit freeze will depend on both the individual’s asset allocation and the future rates of return in each asset class. In an attempt to simplify the presentation of the results, only two alternatives scenarios are presented: one in which the employee is assumed to earn a constant 4 percent nominal rate of return each year until retirement age and a second in which the employee is assumed to earn a constant 8 percent rate of return. Overall Results by Plan Type • 4 percent rate of return: The median indemnification contribution rate for a career-average defined benefit pension plan is 11.6 percent, assuming a 4 percent rate of return. An indemnification contribution rate of 18.8 percent would be sufficient to cover 75 percent of the employees covered by this type of plan. The median rate for a final-average plan is larger, as expected, at 13.5 percent, and the threshold rate for the 75th percentile increases to 21.0 percent. Cash-balance plans have a median indemnification contribution rate of 4.6 percent, with a 75th-percentile threshold rate of 6.3 percent using the current interest credits.7 • 8 percent rate of return: If the rate of return assumption is increased to 8 percent nominal, the median indemnification contribution rate for a career-average defined benefit plan is 6.6 percent. An indemnification contribution rate of 14.8 percent would be sufficient to cover 75 percent of the employees covered by this type of plan. The median for a final-average plan is 8.1 percent and the 75th-percentile threshold increases to 16.0 percent. Cash-balance plans have a median indemnification contribution rate of 2.7 percent, with a 75th-percentile threshold of 4.5 percent using the current interest credits.8

Results by Age and Plan Type Although the median indemnification contribution rates for career- and final-average plans at a 4 percent rate of return were 11.6 percent and 13.5 percent, respectively, these values ignore the impact of the employee’s age on the rates. Figure 11-3 shows that the median rates increase substantially with the age of the employee. For career-average plans, the medians increase from 5.1 percent for those currently aged 30–34 to 20.1 percent when they are 60–64. Final-average plans have an even larger increase: from 3.9 percent to 22.4 percent. Cash-balance plans display little variation by age regardless of the interest credit chosen.

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FIGURE 11-3. Median Percentage of a Worker’s Annual Pay Needed to Offset the Impact of a Pension Freeze in 2006, by Pension Plan Type and Current Age (assumes 4% annual rate of return) Source: Author’s tabulations from the EBRI/ERF Retirement Income Projection Model.

Figure 11-4 shows similar results when an 8 percent rate of return is chosen: the indemnification contribution rates for career-average plans increase from 1.4 percent for the youngest workers analyzed to 16.6 percent for the oldest cohort, while the rates for final-average plans increase from 1.1 percent to 18.6 percent for the respective age cohorts. Cash-balance plans remain much flatter than the other two types but no longer appear age-invariant: the rates increase from 1.1 percent to 4.8 percent for the young/old age cohorts when current interest credits are used, and 1.7 percent to 5.4 percent when long-term rates are assumed. As defined benefit pension sponsors continue to freeze benefit accruals for new and/or current employees and substitute either new or enhanced 401(k) plans, many observers will be concerned whether the total expected retirement income from the combination of the frozen defined benefit and the new/additional 401(k) balances will equal or exceed what the employees might have thought they would receive from the original defined benefit plan, assuming it continued without modifications. As figures 11-3 and 11-4 show, there is tremendous variability regarding what it would take to financially indemnify an employee for such a freeze. Because workers affected by a pension freeze vary greatly by age, salary, and job tenure; by the specific provisions and formula in the types of retirement plans they are covered by (both pension and 401(k)); and by the underlying economic assumptions that are used to estimate the effects of a pension freeze, there is fundamentally no simple answer to the question. However, these data illustrate the general impact of age and tenure: Older, longer-tenure workers

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FIGURE 11-4. Median Percentage of a Worker’s Annual Pay Needed to Offset the Impact of a Pension Freeze in 2006, by Pension Plan Type and Current Age (assumes 8% annual rate of return) Source: Author’s tabulations from the EBRI/ERF Retirement Income Projection Model.

tend to be affected by a pension freeze more than younger workers because they do not have as much time left in their working careers to accumulate funds in a 401(k) plan to offset the accrual loss from a pension freeze. HOW WILL AUTOMATIC ENROLLMENT PROVISIONS FOR 401(K) PLANS IMPACT RETIREMENT INCOME ADEQUACY? The retirement income prospects for future generations of retirees have been modeled by the Employee Benefit Research Institute (EBRI) extensively in recent years, in an attempt to more accurately predict how various cohorts of Americans will likely fare in retirement. Results have ranged from very bleak for substantial portions of the U.S. population to fairly positive for 401(k) participants with continuous coverage throughout their working careers: Results suggest a significant portion of these workers’ preretirement income could be replaced by 401(k) accumulations when combined with Social Security (at the least Social Security benefits projected under current statutory provisions). Assuming that 401(k) accumulations are used to purchase nominal annuities at age 65, the EBRI/ICI 401(k) Accumulation Projection Model predicts baseline median replacement rates at retirement ranging from 51 to 69 percent, by quartile, based on final five-year average salary (‘‘replacement rate’’ meaning the percentage of a worker’s final salary that is replaced in retirement by a nominal annuity purchased by 401(k) assets). However, these

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FIGURE 11-5. Median Replacement Rates1 from 401(k) Accumulations2 for Workers Turning 65 between 2030 and 2039, by Income Quartile at Age 65 (percentage of final five-year average salary) Source: EBRI/ICI 401(k) Accumulation Projection Model. 1 In all four simulations presented in this figure, workers experience continuous employment, continuous 401(k) plan coverage, and investment returns based on historical returns from 1926 to 2001. In the baseline, only 401(k) participants with account balances at year-end 2000 are considered. In the other three scenarios, all eligible workers are considered. 2 The 401(k) accumulation includes 401(k) balances at employer(s) and rollover IRA balances.

baseline results were predicated on the assumption that any worker currently participating in a 401(k) plan would continue to be offered a 401(k) plan for each future job. If it is assumed that the worker would have only an average chance of being offered a 401(k) plan at future jobs, the income replacement rates decrease to a range of 21–26 percent. While this scenario is certainly far too pessimistic to be correct, the disparity between the two sets of results demonstrates the importance of continued participation in a 401(k) plan throughout an employee’s working career. A year prior to the enactment of the Pension Protection Act of 2006 (PPA), the EBRI/ICI 401(k) Accumulation Projection Model was used to simulate the impact of universal adoption of automatic enrollment features under a combination of default contribution rates and default investment allocations (Holden and VanDerhei 2005). In order that the beneficial effect of the expected increase in participation rates could be included in simulation results, ‘‘synthetic’’ employees were generated in the model to include eligible workers who chose not to participate in the 401(k). When these employees were added to the model, the median replacement rates under the baseline assumption mentioned above decreased significantly for the lowest-income quartile (23 percent, down from 51 percent) but only mildly for the highest-income quartile (56 percent, down from 67 percent).

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FIGURE 11-6. Impact of Automatic Escalation: Percentage Increase in Median Replacement Rates from 401(k) Accumulations for Workers Turning 65 between 2030–2039, by Income Quartile at Age 65 (compared to baseline of PPA matching without automatic escalation) Source: Author’s simulations from the EBRI/ICI 401(k) Accumulation Projection Model. 1 Retirement Confidence Survey.

Assuming that all 401(k) plan sponsors would adopt automatic enrollment immediately (in 2005), the median replacement rates for the lowestincome quartile increased to 37 percent (from the 23 percent baseline) even under the conservative assumptions of a 3 percent default contribution rate and a money market default investment (see figure 11-5). When the default contribution rate was increased to 6 percent and the default investment was changed to a life-cycle fund, the median replacement rate for this group increased further to 52 percent. These results illustrate the very strong improvements that can result from automatic enrollment of workers in a 401(k) plan—especially for the lowest-income workers. VanDerhei 2007a reports data from the 2007 Retirement Confidence Survey (RCS), fielded several months after the enactment of the PPA to estimate the additional retirement income likely to arise from the implementation of automatic escalation of contributions in 401(k) plans. One of the extremely important plan design decisions a 401(k) plan sponsor must make because of the PPA is whether to introduce automatic enrollment features. There is extensive literature on the potential benefits of automatic enrollment on participation rates, especially for young employees and those with low incomes. However, there is also a recognition that the introduction of these programs has a tendency to ‘‘anchor’’ participants’ contribution rates and asset allocation to the defaults chosen by the sponsor; hence, the overall increase in expected account balances from adopting these

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plans will be a function of both the employee’s relative wage level and the employer’s default decisions.9 Figure 11-6 summarizes the results in VanDerhei 2007a by comparing the median replacement rates against the baseline in each of six scenarios by whether the contribution is constrained by the safe harbor minimum or maximum, or whether the full RCS distribution can be used. Not surprisingly, the maximum impact is seen when the full RCS distribution is used (without constraints) and the scenario in which employees maintain the contribution rate from the previous employer when they change jobs is assumed. In that case, the median replacement rate for the lowest-income quartile increases by 28 percent, while the rate for the highest-income quartile increases by 12 percent. Even for the scenario with the smallest expected impact, the lowest-income quartile still experiences an income replacement rate increase of 11 percent and the highest-income quartile increases by 5 percent. CONCLUSION The process of projecting which individuals are likely to have adequate retirement income has always been problematic. This has undoubtedly become more difficult in the last two decades, as the private retirement system in the United States has gradually evolved from one that was, for many employees, focused primarily on defined benefit plans to one that is more of a hybrid between defined benefit (pensions) and defined contribution (401(k)-type) plans.10 The reason for the increased modeling difficulties stems largely from the introduction of employee choice as a major determinant of the eventual retirement income for a retiree. In a defined benefit plan, the employer makes most (if not all) of the decisions, and an employee is either covered or not. Once the likelihood of coverage and the generosity parameters of the plans are modeled, the only major uncertainty is the employee’s participation in the labor market, relative wage growth, and job change behavior. Defined contribution plans offer several additional modeling challenges, in addition to the need to project future investment income, at least as currently designed. In many defined contribution plans, employees must make the decision to participate and, if they do, how much to contribute and where to invest their own employee contributions and (if offered) often the employer contributions. Job turnover presents another modeling challenge, as the probability of cashing out (as opposed to retaining the amounts in the current employer’s plan or rolling them over to the new employer’s plans and/or an IRA) must be estimated. Another problem arises at the time of retirement, given the increased probability that employees will need to deal with longevity risk, as opposed to purchasing an immediate annuity or otherwise shifting at least some of this risk to another entity similar to the annuity options inherent in a defined benefit plan.

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Any accurate analysis must pay careful attention to the likely structural changes in defined contribution plans by sponsors that modify their defined benefit plans. VanDerhei (2007b) demonstrates that a much larger percentage of defined benefit sponsors that have either closed or frozen their pension plans in the last two years, or plan to do so in the next two years, will end up with automatic enrollment provisions in their defined contribution (401(k)-type) plans than their counterparts who do not adopt these changes to their defined benefit plan pensions. The ability to establish defined benefit–type provisions (such as automatically enrolling employees in the plan and making default contribution and asset allocation decisions for them) in the defined contribution plan has extremely important public policy implications. As is typically true in the private retirement universe, plan sponsors’ reaction to influences such as the Pension Protection Act of 2006 and the Financial Accounting Standards Board’s modifications of pension accounting requirements will likely be quite varied. Projection models will need to reflect employer modifications to their retirement plans and employees’ responses to those changes to evaluate the likely impact of these changes on overall retirement income adequacy for future retirees.

NOTES 1. Plans often allow retirement at an earlier age subject to a permanent reduction in the annual benefit. 2. The same simulations for stylized lower-income retirees would require significantly larger replacement rates, since non–health care retirement expenditures are not reduced proportionally with retirement income, nor is the health care expense typically a function of income. 3. After the retirement income and wealth was simulated for each family unit, we simulated 1,000 observations (from retirement age until death of the individual for single males and single females or the second person to die for families) and computed the present value of the aggregated deficits at retirement age. At that point, we rank-ordered the observations in terms of the present value of the deficits and determined the 75th and 90th percentiles of the distribution. Next we determined the future simulated retirement income accumulated to retirement age and used this information to determine the percentage of compensation that would need to be saved to have sufficient additional income to offset the present value of accumulated deficits for the 75th and 90th percentiles of the distribution. 4. Additional estimates in VanDerhei and Copeland 2003 include both the status quo for Social Security benefits as well as two reform scenarios that would decrease benefits for future generations. 5. Final-average defined benefit plans base the annual retirement benefit on average compensation near the end of the employee’s tenure with the plan sponsor, whereas benefits paid by career-average defined benefit plans are a function of compensation over the employee’s entire tenure with the plan sponsor.

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6. Cash-balance plans are defined benefit plans in which the benefit formula resembles a defined contribution plan: a notional account balance is maintained based on annual pay credits and interest credits. Unlike defined contribution plans, cash-balance plans are not participant directed and employers guarantee the investment income that will be provided during a specific period. 7. These values increase to 5.7 percent and 7.3 percent if, instead, the cashbalance plans are assumed to credit interest at the intermediate long-term assumption for the interest rate of the Treasury special public-debt obligation bonds issuable to the Old-Age, Survivors, and Disability Insurance (OASDI) trust funds, as specified in the 2005 Trustees of the OASDI Trust Funds Report (5.8 percent). 8. These values increase to 3.1 percent and 5.2 percent if the cash balance plans are assumed to credit interest at 5.8 percent. 9. The PPA provided a significant incentive for employers that had not already adopted automatic enrollment to reconsider their decision. The PPA preempts state laws that might affect plans adopting automatic enrollment provisions and provides additional nondiscrimination safe harbor protections for them. To qualify for the automatic enrollment safe harbor, the contribution rate for automatic enrollees must be at least 3 percent of salary during the first year of participation, 4 percent during the second year, 5 percent during the third year, and 6 percent thereafter. The plan may specify a higher contribution up to a maximum of 10 percent. 10. Although the explosion of 401(k) plans following the release of the proposed regulations in November 1981 is often cited as the catalyst of the defined contribution plan expansion, other types of defined contribution plans were already quite prevalent, and indeed defined contribution plans already accounted for 69 percent of the total number of private defined retirement plans in 1981 (albeit that many of these were small plans, and in terms of active participants, defined contribution plans only accounted for 41 percent of the total). See Olsen and VanDerhei 1997 for more detail.

REFERENCES Copeland, Craig. 2006. Individual account retirement plans: An analysis of the 2004 Survey of Consumer Finances. Employee Benefit Research Institute (EBRI) Issue Brief No. 293. Washington, DC: Employee Benefit Research Institute. ———. 2007a. Employment-based retirement plan participation: Geographic differences and trends, 2006. EBRI Issue Brief No. 311. Washington, DC: Employee Benefit Research Institute. ———. 2007b. Employment status of workers age 55 or older. EBRI Notes 28 (8): 1–7. ———. 2007c. Labor-force participation: The population age 55 or older. EBRI Notes 28 (6): 1–8. Holden, Sarah, and Jack VanDerhei. 2005. The influence of automatic enrollment, catch-up, and IRA contributions on 401(k) contributions at retirement. EBRI Issue Brief No. 283. Washington, DC: Employee Benefit Research Institute. Olsen, Kelly, and Jack VanDerhei. 1997. Defined contribution plan dominance grows across sectors and employer sizes, while mega defined benefit plans remain strong: Where we are and where we are going? In Retirement prospects in a defined contribution world, ed. Dallas Salisbury, 55–92. Washington, DC: Employee Benefit Research Institute.

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Toossi, Mitra. 2007. Labor force projections to 2016: More workers in their golden years. Monthly Labor Review 130 (11): 33–52. VanDerhei, Jack. 2004. Measuring retirement income adequacy, part one: Traditional replacement ratios and results for workers at large companies. EBRI Notes 25 (9): 1–14. ———. 2006. Measuring retirement income adequacy: Calculating realistic income replacement rates. EBRI Issue Brief No. 297. Washington, DC: Employee Benefit Research Institute. ———. 2007a. The expected impact of automatic escalation of 401(k) contributions on retirement income. EBRI Notes 28 (9):1–8. ———. 2007b. Retirement income adequacy after PPA and FAS 158: part one—Plan sponsors’ reactions. EBRI Issue Brief No. 307. Washington, DC: Employee Benefit Research Institute. VanDerhei, Jack, and Craig Copeland. 2003. Can America afford tomorrow’s retirees? Results from the EBRI-ERF Retirement Security Projection Model. EBRI Issue Brief No. 263. Washington, DC: Employee Benefit Research Institute.

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Medicare in the Image of the Baby-Boom Generation EDWARD F. LAWLOR

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he imminent march of the baby-boom generation into old age begs for a rethinking of the philosophy, coverage, and incentives in Medicare policy to assure a good fit between the health circumstances of the population and the delivery of health care services. Much has changed since Medicare’s implementation in 1965, not the least being the epidemiology and major health circumstances of a population that has grown older under profoundly different conditions than the first generation of beneficiaries some fifty years ago. All of the recent tumult over the Medicare Modernization and Prescription Drug Act (MMA)—the doughnut hole, state financing of Medicaid—has effectively crowded out ‘‘big think’’ and discussion of Medicare’s future vision and appropriate policy design for coverage and benefits of the babyboom generation. Behind the scenes of these Medicare Part D controversies, however, has been a steady accretion of literature and futuristic policy thinking about the broader coverage and design of the Medicare program. Spread out over a variety of disciplines, journals, and the Web are ideas and proposals to enhance Medicare’s prevention and health promotion orientation, better map coverage to chronic and long-term care, better extend the Medicare franchise to mental health and disabilities, introduce evidence-based models of disease management, and upgrade the geriatric and gerontology

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workforce to produce more appropriate and cost-effective care. Taken together, this literature envisions a Medicare program that puts much greater emphasis on social functioning, community-based care, continuity of care, and reallocation of resources from high technology to health promotion, primary care, and social support. Of course, many of these ideas have been described and advocated for a long time in the literature on successful aging, productive aging, public health, and geriatric medicine; and some of these priorities have even been piloted or demonstrated in small ways in the existing Medicare program. The MMA itself made some modest advances to promote this agenda of care: The Chronic Care Improvement Program (now called Medicare Health Support), for example, pilots and then presumably will cover new services for beneficiaries with diabetes, congestive heart failure, and chronic obstructive pulmonary disease (COPD). The Case Management for High Cost Beneficiaries program attempts to get physicians, hospitals, and other providers to implement new forms of disease management. But the politics and economics of ‘‘body part’’ medicine, as well as the constituencies and money that surround particular conditions or treatments, have effectively militated against significant change in the overall philosophy or design of the program along these lines. Indeed, the very notion that we are adding ‘‘parts,’’ now Part D, to the Medicare program signals that the fundamental constructs of hospital and medical coverage in Medicare have been largely retained since 1965. This chapter sketches a set of alternative purposes, design contours, and potential politics for a next-generation Medicare, one that anticipates the new epidemiology and vision of aging in the next fifty years of the program. However, the policy, political, and economic obstacles in the way of such a vision are daunting, PURPOSES There is no doubt that Medicare has been extremely successful in realizing its initial policy vision. The program dramatically improved access to medical care, provided substantial financial protection to the elderly and disabled, supported the unprecedented advancement of the health care industry, and enjoyed enormous popular and political support. Coverage and reimbursement emphasized acute and episodic care provided by physicians and hospitals, with other covered services triggered by medical decision making. Medicare skilled nursing home and home health care coverage, for example, were triggered by an acute hospital episode and were largely conceptualized as lower-cost substitutes for inpatient care, not social or supportive services in their own right. On the professional side, Medicare reimbursement is generally restricted to physician services or those services that are conditional on physician services or orders. This places heavy

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restrictions on the role and contribution that allied health professionals can play in care and effectively eliminates a host of potentially valuable (and potentially cost-effective) case management, counseling, and educational functions in geriatric health services. While this acute, medical, and episodic model of Medicare grew out of the policy of 1965 and its subsequent politics, much has changed in the social and economic circumstances, as well as the medical and health demands, of Medicare beneficiaries. The paradigmatic conditions that shaped the ‘‘old’’ Medicare were heart disease, cancer, and stroke. The paradigmatic conditions of the next generation of Medicare will be chronic conditions such as diabetes, mental health conditions such as depression, dementia, and the interactions of such conditions as osteoporosis with falls or other life shocks. Consider these epidemiologic facts, generally well known to students of public health and aging: 1. Chronic conditions: More than 80 percent of Medicare beneficiaries have a chronic condition; the quarter of beneficiaries who have five or more chronic conditions account for 68 percent of Medicare expenditures (Anderson 2005). As Gerald Anderson (2005) has documented, use of the health system by this group of beneficiaries with multiple chronic conditions is extraordinary: averaging thirteen different physicians (ambulatory and inpatient) and filling fifty prescriptions per year. 2. Dementia: Estimates of the prevalence of dementia in the population age 65 and over range from 5 to 10 percent of the population, with the absolute numbers of Medicare beneficiaries with Alzheimer’s and other dementias expected to triple in the next fifty years. Kenneth Langa and his colleagues (2001) at the University of Michigan estimate that the additional yearly cost of informal care for each case amounted to $3,630 for mild dementia, $7,420 for moderate dementia, and $17,700 for severe cases. 3. Mental health: Best estimates of the prevalence of significant depression in old age place rates between 15 and 33 percent of the population at a moment in time (Gallo and Lebowitz 1999; Cole, Bellavance, and Mansour 1999). Depression by itself has important implications for functional and cognitive decline and has complex interactions with alcohol and substance abuse, anxiety disorders, suicide, and dementia. Just the informal caregiving provided to older persons with depression accounts for more than $9 billion annually (Langa et al. 2004). 4. Obesity and diabetes: Already, diabetes affects 12 percent of the elderly population. The dramatically increasing rates of obesity and diabetes in younger cohorts mean that this condition and its comorbidities will affect a large proportion of Medicare beneficiaries and account for increasing costs in the program. By 2010, the prevalence of obesity is expected to increase to 37 percent of persons age 60 and older (Arterburn, Crane, and Sullivan 2004). The costs of these cases are tremendous. A recent study by Lakdawalla, Goldman, and Shang (2005) estimates that obese 70-year-olds will spend

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about $39,000 more on health care than persons of normal weight. These persons will experience higher rates of diabetes, hypertension, and heart disease. Although these beneficiaries will cost Medicare an average of 34 percent more, they will not necessarily experience shorter life expectancies, but will experience fewer disability-free life years. 5. Orthopedics, arthritis, pain, and the rehabilitative disciplines: With the aging of the baby-boom population comes a shift in the physical and functional limitations of the older population. Some of this is a result of different life experiences and exposure (such as life courses of physical activity), and some of it follows from increasing life expectancies and attendant falls; prevalence of arthritis, osteoporosis, and back pain; and advances in joint replacement, orthopedic surgery, and rehabilitative science. This changing priority for a rehabilitative orientation for Medicare is already evident in prevalence rates for the older population. Arthritis, for example, is the most prevalent chronic condition among older persons in general and for each ethnic and racial minority group. It is projected to increase from 15 percent of the over-65 population in 1990 to 18.2 percent (59.4 million persons) in 2020 (Dunlop et al. 2001).

Of course, none of these conditions are mutually exclusive in populations, nor do they represent distinct classes of beneficiaries, which makes the traditional policy approach of ‘‘carving out’’ these conditions and treatments all the more counterproductive. Patients (and families) with dementia tend to have high rates of depression and other chronic conditions. Patients with diabetes tend to exhibit high rates of depression, heart disease, kidney disease, hypertension, strokes, and visual and other impairments. Acute episodes of care disproportionately affect all of these groups. There are many ways to think about the costs and larger significance of these interactions among prevention and health promotion, chronic care, mental health, and long-term care. An analysis by James Lubitz and his colleagues (2003) and an accompanying editorial by David Cutler (2003) suggests an intriguing hypothesis: systematically tying medical advances to ‘‘nonmedical’’ approaches such as behavior change, cognitive stimulation, and education could produce the policy equivalent of a ‘‘win-win,’’ improving life expectancy and functioning with no net increase in lifetime costs. INGREDIENTS OF A TRULY MODERN MEDICARE SYSTEM Prevention and Promotion A large body of recent scientific evidence has established the feasibility, efficacy, and cost-effectiveness of pursuing prevention and health promotion strategies in old age (Rowe 1999; Russell 1998). Modern thinking about the process of aging itself—particularly the plasticity and behavioral change that occurs into very old ages—provides the basis for thinking very differently about the possibilities and efficacy of prevention and health promotion in Medicare.

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While some demonstrations and selected programs have promoted screening (e.g., mammography), behavioral changes (e.g., quitting smoking), injury reduction (e.g., prevention of falls), and appropriate medications use (e.g., antihypertensives), the Medicare-related promotion-and-prevention enterprise is still extremely limited. Mobilizing a vigorous health promotionand-prevention approach would require a substantial research and development (R&D) effort (to identify the battery of cost-effective approaches), incentives and supports for beneficiaries to engage in such behaviors, the careful targeting of prevention and promotion, and engagement of a set of organizations such as senior centers that have acted outside the orbit of traditional Medicare policy and payment. Disease Management Although disease management approaches have been embraced by Congress and the Centers for Medicare and Medicaid Services (CMS) as promising strategies, particularly for high-cost chronic conditions, the early evaluation returns have been mixed. However, sophisticated and prospective models of care for chronic conditions will require much more scale, time, innovation in delivery systems, and resources than have been deployed in the demonstrations to date. In particular, these approaches need to be tailored to the reality that many, if not most, candidates for disease management present with multiple chronic conditions with high degrees of social complexity and high-cost trajectories of care. Beneficiary-centric, Patient-centric It is possible that a convergence of some ideological forces and some applied innovations in the organization and financing of health services in old age will produce a significant shift in the payment and control of services. On the ideological side, the recent and not-so-recent push to increase consumer control and choice in health care has produced ripples in design and incentives across the Medicare program. On the innovation side, the early results from experiments in ‘‘cash and counseling’’ and other demonstrations of consumer-directed chronic and long-term care have established the feasibility and some of the benefits that arise from greater individual and family responsibility over care. Most intriguing is the early evidence about the potential benefits of so-called self-management approaches in chronic care. As Edward Wagner and his colleagues have summarized in their review of evidence-based approaches to chronic illness, ‘‘There is now considerable evidence that individual and group interventions that emphasize patient empowerment and the acquisition of self-management skills are effective in diabetes, asthma and other chronic conditions’’ (Wagner et al. 2001, 74).

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Compensation for Socioeconomic Status Health care providers know that life histories of poverty, poor access to medical care, environmental exposure, and other socioeconomic determinants of health status in old age compound the challenge of delivering Medicare-financed services, especially for chronic conditions. The chief executive officer of a large health system once complained to me that his hospitals had ‘‘a Medicaid population grown old’’ in its Medicare services, and he believed that coverage, reimbursement, and support systems were woefully inadequate for compensating the life histories of many of his system’s poor and minority patients. In health services research, this problem has been framed largely as inadequate risk adjustment, where the comorbidities and complications that arise for disadvantaged populations do not capture the full extent of risk and expense in care. But when a broader conception of Medicare—one that takes full account of chronic and long-term care needs—is contemplated, disadvantages in social supports, the built environment, and allied health services take on increased significance. Systematic differences in access to these supports and services by socioeconomic status would require a broad rethinking of coverage and payment for Medicare to assure equity across beneficiaries. Delivery System Reform Just as the epidemiology of chronic and long-term conditions highlights the prevalence of many chronic conditions, so too the delivery systems for the next generation of care will need to be much more variegated and flexible. Some of the most interesting new models of geriatric and chronic care seamlessly mix such diverse disciplines as nutrition counseling, vision care or dentistry, physical therapy, and mental health. Moreover, they support medical services with appropriate phone follow-up, transportation services, and patient education so as to increase the likelihood of behavior change or adherence to treatment. Recent Medicare reform has recognized the importance of chronic conditions and the salience of quality improvement for this population (Daaleman 2006). Section 231 of the MMA provides encouragement and incentives for managed care plans to develop innovative and specialized plans to address the needs of beneficiaries with disabilities or chronic conditions. The development of these alternatives may be an important testing ground for larger payment and delivery system reforms to address disabilities and chronic conditions. Agents and Support Systems Much of the challenge for beneficiaries—especially the kinds of beneficiaries with disabilities, chronic conditions, mental illness, dementias, and

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other vulnerabilities—lies in navigating the complex array of Medicare coverage, medical providers, and social supports. In practice, the medical decisions are inextricably linked with the support systems of families and communities, housing, home care, transportation, and so forth. Typically, these decisions need to be made under duress, when a beneficiary is sick, confused, or experiencing a crisis of housing or care. Missing in this system is a solution to the agency problem that most beneficiaries face in organizing care and supports, making medical and related decisions, and managing the complexities posed by Medicare’s particular structure of coverage (Lawlor 2003). While much of the national discussion has implied that physicians need to take a stronger role in care management, it is not at all obvious that the professional orientation of doctors is appropriate to the task, or that the basic approach should not be more interdisciplinary (Sommers et al. 2000). The private market has produced some modest examples of agents; public and nonprofit organizations such as Area Agencies on Aging provide some of these agency functions (particularly information and referral), and the medical system has some experiments (such as the National Cancer Institute’s Patient Navigators) in patient decision making and care support. While these examples are notable, they represent a tiny intervention in the scale of complexity and frequency of decisions that Medicare beneficiaries are asked to make. An Appropriate Workforce Almost any careful analysis of community-based, chronic, or long-term care highlights the fundamental problem of workforce training and supply to respond to the demands of an aging society. Even in the medical sphere, the failure of geriatrics to grow as a discipline in numbers and stature illustrates the disconnect between national need and professional response. Outside of medicine, the relatively small numbers of nurses, social workers, physical therapists, occupational therapists, and other allied disciplines who have been specifically trained and reimbursed to provide continuity of care in aging is a serious constraint to building an appropriate delivery system. Already, 91 percent of nursing homes report that they do not have sufficient staff to provide basic care. Even paraprofessional or nonprofessional responses to this national need are missing. Closely tied to our inability to publicly pay for services that are not intrinsically connected to a Medicarereimbursed physician visit or procedure is the lack of a market response that provides low-tech and community-based supportive services in old age. The Technology Quid pro Quo The ability to manage technology in the acute sector is the quid pro quo of building a modern policy approach to preventative, chronic, and long-term

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care. Technology is the single largest mutable long-term driver of Medicare costs and effectiveness. Because Medicare has never developed a rigorous approach to technology assessment and coverage decisions, instead loosely relying on the ‘‘reasonable and necessary’’ criteria of the original legislation, new acute medical technology is the tail wagging the dog in program coverage and cost. One of the major obstacles to overcome in implementing more formal technology assessment is the historic political opposition to the use of costeffectiveness criteria and the explicit consideration of costs in Medicare coverage decisions. If better management of technology in Medicare coverage decisions were not a big enough policy challenge, an additional analytic and policy hurdle is the adoption of quality-of-life and functional outcomes as explicit criteria for all Medicare coverage services. The hypothesis of this chapter is that if quality-of-life and functional outcomes were given true standing in the Medicare coverage process, then a variety of low-tech supportive services would be justifiable on cost-effectiveness grounds, and some of the most expensive acute interventions would not. At a minimum, effective behavioral approaches for diet or physical rehabilitation would be put on equal footing for coverage with left ventricular assist devices or lung volume reduction surgery. In order to move this agenda without the fear of uncontrollable costs and coverage, tough-minded approaches to intervention (Freedman et al. 2006b) and cost-effectiveness analysis in Medicare (Neumann, Rosen, and Weinstein 2005) will be necessary. Complications Would this reorientation of Medicare imply an abandonment of Medicare’s acute coverage tradition or a retreat from the success of medical advancement and care that have been the hallmark of Medicare’s first forty years? Not really. This change would move the center of gravity of Medicare’s coverage and payment policy from the acute setting to chronic and long-term care, effectively shifting the conceptualization of care from episodic to longitudinal. Instead of treating and paying for care one episode at a time, providers and payment would be restructured to move with the patient along the journey of home, community, chronic, acute, and longterm care. Instead of preventive, chronic, and long-term care being seen as appendages to an acute episode, these become the fundamentals of a social and health care plan, with acute episodes interspersed. The easiest place to start would be the Medicare Advantage Program, where payment and mandate to managed care providers could be feasibly adapted to promote prevention, social functioning, and quality-of-life outcomes. Some of this is already occurring. Indeed, this approach would bring managed care back to the prevention-and-promotion vision of the early prepaid health care movement in the United States.

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The fear that mushrooming costs would accompany a move to a more community-based, public health–oriented, and social approach to Medicare policy has effectively chilled serious discussion of ways in which this might happen in a cost-effective and fiscally prudent way. The principal fear is the ‘‘woodwork effect,’’ where millions of beneficiaries and their families would come out of the woodwork to take advantage of community-based and social services under a chronic or long-term care regime. A government official once complained to me that community-based approaches to long-term care would cost ‘‘kazillions of dollars’’ because so many households would shift the responsibility for care and support over to the public sector. There is also no natural or substantial political constituency for such reform, and powerful interests are invested in protecting the status quo. Many years ago, Carroll Estes (1983) described the ‘‘aging enterprise,’’ a version of the medical-industrial complex that attaches to medical and social services in aging. In the current day, this political economy might be better described as the Medicare-industrial complex, where large interests representing pharmaceuticals, medical suppliers, academic medicine, hospitals, and specialty societies are politically organized and well financed to protect a strongly biomedical version of Medicare coverage. GETTING FROM HERE TO THERE This chapter has made the argument that Medicare needs a fundamental, not incremental, shift in its philosophy of care and social support to address the changing epidemiology and life circumstances of beneficiaries in the twenty-first century. In effect, Medicare needs to adopt a new gestalt of policy that embraces the reality of chronic and mental health conditions in the population and promotes allied health professionals, payment incentives, delivery systems, and agents to better support vulnerable beneficiaries as they navigate the complexities of cognitive declines, multiple diagnoses, and misfits in their housing and social supports. Imagine a Medicare program that supports the careful and ongoing assessment of the health and social needs of beneficiaries, supports a delivery system that provides the metaphorical continuum of care and social support, and is disciplined by cost-effective approaches to improving quality of life and social functioning. Such a program would depart significantly from the original policy architecture of Part A (Hospital Care) and Part B (Supplemental Medical Insurance), and its successors in Parts C and D. Such a program would anticipate the epidemiological realities of health behavior, mental health, chronic conditions, long-term care, and social functioning as primary, not secondary, constructs for policy design. Such a program would anticipate and respond to the challenges of diabetes, Alzheimer’s, and osteoporosis in an aging population. A modern Medicare program would be specifically configured to deal with a beneficiary population (and their families) dealing with these

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complex bundles of cognitive, behavioral, mental health, physical, and medical conditions. A recent framework by the Assistant Secretary for Planning and Evaluation of the Department of Health and Human Services, for example, emphasizes the following interventions for reducing and addressing the prevalence of disability in the older population: 1. 2. 3. 4. 5. 6. 7.

implementing smoking cessation improving exercise implementing good chronic disease care implementing depression screening, treatment, and follow-up implementing fall prevention systems for frail elderly persons modifying homes and providing assistive devices implementing widespread care planning for seriously ill people (Friedman et al. 2006b)

It is interesting how closely this overall framework for high-impact interventions for late-life disability reflects the discussion of a priority agenda for Medicare itself in this chapter. To take this agenda seriously, a different paradigm of services R&D, financing and payment reform, and workforce development will be necessary. Indeed, some of the recent reforms have had the effect of diminishing rather than enhancing the capacity of the system to respond to complex bundles of beneficiary and caregiver needs that span the acute, chronic, and long-term care spectrum. For example, the recent extension of prospective payment for long-term and post-acute care facilities had the effect of reinforcing the ‘‘silos’’ of care for Medicare beneficiaries, not necessarily encouraging the selection of the most appropriate and cost-effective environment for services across provider types. Reframing the agenda would require significant political push and champions, both from within the Congress and without. Without leadership in Congress and a dedicated effort by the large membership organizations such as AARP (who have not shown an appetite to pursue this vision aggressively), it is still hard to imagine a reframing of the Medicare agenda that truly embraces health prevention and promotion and the chronic, mental health, disability, rehabilitation, dementia, and long-term care for an aging population. REFERENCES Anderson, G. F. 2005. Medicare and chronic conditions. New England Journal of Medicine 353 (3): 305–9. Arterburn, D. E., P. K. Crane, and S. D. Sullivan. 2004. The coming epidemic of obesity in elderly Americans. Journal of the American Geriatrics Society 52 (11): 1907–12.

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Cole, G. C., F. Bellavance, and A. Mansour. 1999. Prognosis of depression in elderly community and primary care populations: A systematic review and meta-analysis. American Journal of Psychiatry 156 (8): 1182–89. Cutler, D. M. 2003. Disability and the future of Medicare. New England Journal of Medicine 349 (11): 1084–85. Daaleman, T. P. 2006. Reorganizing Medicare for older adults with chronic illness. The Journal of the American Board of Family Medicine, 19: 303–9. Dunlop, D., L. M. Manheim, J. Song, and R. W. Chang. 2001. Arthritis prevalence and activity limitations in older adults. Arthritis & Rheumatism 44 (1): 212–21. Estes, C. 1983. The aging enterprise. San Francisco: Jossey-Bass. Freedman, V. A., N. Hodgson, J. Lynn, B. C. Spillman, T. A. Waidmann, A. M. Wilkinson, and D. A. Wolf. 2006a. A framework for identifying high-impact interventions to promote reductions in late-life disability. Prepared for the Office of Disability, Aging and Long-Term Care Policy, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. Available at http://aspe.hhs.gov/daltcp/reports/2006/prodecl.pdf. ———. 2006b. Promoting declines in the prevalence of late-life disability: Comparisons of three potentially high-impact interventions. Milbank Quarterly 84 (3): 493–520. Gallo, J. J., and B. D. Lebowitz. 1999. The epidemiology of common late-life mental disorders in the community: Themes for the new century. Psychiatric Services 50 (9): 1158–66. Lakdawalla, D., D. P. Goldman, and B. Shang. 2005. The health and cost consequences of obesity among the future elderly. Health Affairs 24:R30–42. Langa, K. M., M. Chernew, M. Kabeto, A. R. Herzog, M. B. Ofstedal, R. Willis, R. Wallace, L. Mucha, W. Straus, and A. M. Fendrick. 2001. National estimates of the quantity and cost of informal caregiving for the elderly with dementia. Journal of Geriatric Internal Medicine 16 (11): 770–78. Langa, K. M., M. A. Valenstein, A. M. Fendrick, M. U. Kabeto, and S. Vijan. 2004. Extent and cost of informal caregiving for older Americans with symptoms of depression. American Journal of Psychiatry 161:857–63. Lawlor, E. F. 2003. Redesigning the Medicare contract: Politics, markets, and agency. Chicago: University of Chicago Press. Lubitz, J., L. Cai, E. Kramarow, and H. Lentzner. 2003. Health, life expectancy, and health care spending among the elderly. New England Journal of Medicine, 349 (11): 1048–55. Neumann, P. J., A. B. Rosen, and M. C. Weinstein. 2005. Medicare and cost-effectiveness analysis. New England Journal of Medicine 353 (14): 1516–22. Rowe, J. E. 1999. Geriatrics, prevention, and the remodeling of Medicare. New England Journal of Medicine 340 (9): 720–21. Russell, L. B. 1998. Prevention and Medicare costs. New England Journal of Medicine 339 (16): 1158–60. Sommers, L. S., K. I. Marton, J. C. Barbaccia, and J. Randolph. 2000. Physician, nurse, and social worker collaboration in primary care for chronically ill seniors. Archives of Internal Medicine 160:1825–33. Wagner, E. H., B. T. Austin, C. Davis, M. Hindmarsh, J. Schaefer, and A. Bonomi. 2001. Improving chronic illness care: Translating evidence into action. Health Affairs 20 (6): 64–78.

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13

Long-Term Care Policy as an Investment in Baby Boomers and Future Generations MICHELLE PUTNAM

NATIONAL PLANS FOR MEETING BABY BOOMERS’ CHRONIC CARE AND DISABILITY NEEDS As a nation, we are rather behind and generally unprepared for baby boomer aging. We have no national long-term care policy and a relatively small trained professional long-term care workforce, and most boomers have only modest retirement savings—likely not enough to privately pay for their own long-term care needs. This is the unfortunate truth. As it stands, chronic care and disability in old age (as in younger years) are uninsured, private responsibilities. Medicare insures long-term care for only short periods of time (up to 90 days) and for medical requirements only (U.S. Department of Health and Senior Services 2007a). A relatively small proportion of individuals have private long-term care insurance (an estimated six million individuals as of 2002), but it is often expensive, hard to access, and limited in its coverage and payment (Coronel 2004). Medicaid is the default national long-term care insurer for persons with chronic care and disability needs who have spent their private savings; who are still in need of treatment, equipment, services, and/or supports; and who medically and financially qualify in their state. For those without insurance, care and supports must be privately funded and/or informally provided by family members and friends. For those with insurance, private funds and informal supports are also important supplements, but they generally do not cover the total cost of care (Cohen 2003).

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This poor state of ‘‘readiness’’ (to borrow a term from the Federal Emergency Management Agency) is provoking national concern by state governments worried that Medicaid long-term care costs are financially unsustainable as the older population grows (National Governors Association 2007). Medicaid consumed an average of 17 percent of state budgets in 2005, and costs are projected to rise through 2010 (Smith et al. 2005). There are few alternate policies to fill the void of a dedicated long-term care policy. The Older Americans Act (OAA) programs attempt to do so through case management, home and community-based care, transportation, nutrition, and caregiver support services for persons age 60 and older. But for the size and scope of its mission, appropriations under the OAA remain remarkably low. Using 2005 population estimates (the most recent), the 2008 appropriation represents an allotment of roughly 27 cents for each eligible person (Administration on Aging 2007). A second federal program, the Rehabilitation Act, offers some peer and personal assistance supports through Centers for Independent Living for people of all ages with disabilities. State and local vocational rehabilitation, disability, and aging programs (public and private) also offer a range of services, but they are usually quite modest and in short supply. Thus, as it stands, the United States is not in a strong position to meet the care and support needs of baby boomers as they enter old age. Why are we so far behind in our planning in the long-term care arena? One explanation lies in the lack of political interest and will to create largescale long-term care policy for older adults, a group seen as already having their fair share of entitlements. The passage (in 1988) and later repeal (1989) of the Medicare Catastrophic Care Act set back long-term care policy initiatives and sparked debates of intergenerational equity in the media that continue to present day. The more recent battle for Medicare prescription drug coverage spent most of the remaining political capital for old-age issues, and increasing estimates of program costs for this so-called Part D program regularly remind Americans of how expensive large-scale social welfare benefits directed at older people have become. A second explanation may be that we may have been excessively optimistic about the levels of health and wealth the baby-boom cohort will enjoy. However, boomers self-report lower health status levels than did their parents at the same age (Soldo et al. 2006). And, while baby boomer net worth is higher than their parents’ generation, significant disparities in wealth exist based on race, marital status, and level of education. These disparities, in turn, translate into high levels of inequality in retirement savings (Lusardi and Mitchell 2007). A third reason may lie in our lack of prior exposure to and extensive experience with chronic care, disability supports, and long-term care needs. Baby boomers’ parents are the first generation to live long enough to need extended care and supports en masse. Thus aging, disability, and health care infrastructure—in both the public and private sectors—is still maturing as the baby boomers approach old age.

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Acknowledging these shortcomings and the potential factors behind them, the question at hand is, what do we do now? Taking an optimistic view, this lack of formal attention to long-term care becomes an opportunity to thoughtfully develop chronic care, disability, and long-term care policies that support not only the medical needs of baby boomers but their individual, social, and economic concerns as well. Of course, moving forward will require us to think more critically than we have in the past about the purpose of long-term care and more imaginatively about our assumptions regarding what older adults, and those experiencing disabilities in particular, can contribute to our society. We will need to measure policy outcomes in terms of not just what types and amounts of care and supports are provided but also what people are able to do and contribute to their families and communities once care and supports are provided. In sum, we need to break out of the existing mode of thinking and, instead, understand long-term care policy as an investment in older adults. DEMOGRAPHIC AND SOCIAL TRENDS SUPPORTING AN INVESTMENT STRATEGY IN LONG-TERM CARE For many, investing in older adults with chronic care and disability-support needs may seem to be an unusual idea. However, certain demographic and social trends suggest this approach may match well with the needs and interests of many current older adults and those of the baby boomers as they enter old age. Greater Disability-Related Diversity within Middle-Aged and Older Generations Since 1950, the early life-course period of the baby boom, life expectancy has continually increased. From 1950 to 2004, life expectancy for the total population from birth increased from 68.2 to 77.8 years and rose from 13.9 to 18.7 years at age 65 (Centers for Disease Control and Prevention 2007). In addition, functional impairment has declined among the general over-60 population, and disability has become more compressed into later ages (Cai and Lubitz 2007). Of particular note, life expectancy has increased for persons with chronic conditions and those experiencing physical, mental, and developmental disabilities. With improvements in medical treatment, technology, pharmaceuticals, and self-care procedures, the accidents, injuries, diseases, and acute conditions that previously shortened life have increasingly segued into chronic conditions (Kemp and Mosqueda 2007). Thus, for persons with such conditions as spinal cord injury, cancer, developmental disability, multiple sclerosis, HIV/AIDS, and cerebral palsy, among others, years of life beyond the age of onset have been extended. Each of these trends demonstrates success, but they also help account for the increasing levels of diversity of disability now being experienced by older adults. While

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some will not experience chronic illness or disability until the very end of their lives, others may experience it for much of their lives, and a few even for a majority of their lives. As they age, baby boomers bring still more disability-relevant factors to the older population. Boomers have higher rates of chronic illnesses and conditions such as diabetes and obesity than prior generations (Soldo et al. 2006). Maturing to midlife in an era of rapidly advancing technology, baby boomers are benefiting from earlier detection and more effective treatment of conditions like cancer, Alzheimer’s, and Parkinson’s. Early detection increases the number of persons living ‘‘post-onset’’ of disease, and a growing proportion of such individuals are now among the baby boomers. Finally, the last decade has seen greater recognition of mental health and illness and increasing parity in treatment. As baby boomers grow older, this widens the range of conditions available to categorize their chronic care or disability-related needs. Older Adults’ Expectations of Participation and Engagement Are Changing Traditionally, our conceptualizations of life stages have been linear (education, work, retirement) and paired by a dependency ratio status (noncontributor, contributor, noncontributor). Challenges to these models are being made by current older adults who are making new pathways in old age beyond traditional retirement by remaining in the formal workforce as employees or business owners, volunteering, seeking additional education, or taking on new family roles (Freedman 2006). Baby boomers show signs of following in the footsteps of their parents and older relatives by seeking to remain engaged and active participants in their families and communities (Wilson and Simson 2006). There is no reason to assume that their desire for community participation will decrease due to the presence of chronic conditions or disability. Certainly, there will always be a small minority of older adults who are ill, frail, and medically unable to engage in activities with family, friends, and the wider community. However, for most adults with disabilities, barriers to participation are not only the expense, or cost, of care but more perniciously the stereotypes that ghettoize such individuals as ill and frail and with little capacity to contribute. As older adults’ expectations of what one does in old age change, their expectations for chronic care and disability supports that enhance community involvement rather than only assuring residency at home will increase as well. Technology Is Adding New Ways to Meet Chronic Care and Disability-Related Needs In previous generations, human interventions constituted the majority of informal and formal support provided to meet chronic care and disability

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needs. With the advancement of computers, information technology, and other sciences, the last two decades have seen technology begin to replace, complement, and even supersede human-provided assistance (Freedman et al. 2006). Low-technology devices like canes, bath chairs, and ramps remain important and in widespread use. Now, however, high technology such as Ibot chairs that permit users to climb stairs and roll on unpaved trails, voice and eye command computer devices, smart houses that interact with occupants, and automobiles adapted for user capabilities are increasingly available to consumers. Baby boomers belong to the first high-tech generation, engaging in widespread computer and technology use in their daily lives. They continue to readily adopt new technologies such as in-ear cell phones, global positioning systems in automobiles, and programmable home appliances and electronics that respond to owner needs, preferences, and safety concerns. The capacity to produce technology that meets chronic care and disability-related needs is increasing and more readily brought to mass markets through the Internet. Baby boomers will likely find innovative ways for new and everyday technologies to meet their needs. Baby Boomers Are Becoming Savvy Long-Term Care Consumers In the baby-boomer generation, caregiving for older parents is seemingly ubiquitous. Boomers are the first generation of caregiver consumers—they have experience with aging and disability services, support programs, organizations, and policies that their parents, if they served as caregivers, did not have before they entered old age. As caregivers, boomers’ work was estimated in value at $350 billion in 2006 (Gibson and Houser 2007) and ranged from direct assistance to case management to financial planning. As they interact with aging and disability systems, long-term care insurance providers, and practice professionals, baby boomers are gaining firsthand knowledge of what is and is not working within both acute and long-term care for persons experiencing chronic illness and disability. With long-term care a private concern, caregivers are becoming a powerful consumer group in the marketplace and a broad stakeholder constituency in long-term care policy. As they enter old age, baby boomers will likely be more informed, savvy consumers, having previously been through the insurance systems, service networks, and resource centers. Thus they should, first, be able to ask more critical, probing questions about what options are available for meeting their chronic care and disability-support needs (which may be more accurately self-defined); second, have a better sense of what the best value for their money is; and third, be capable of seeking and finding alternatives if the options provided are unsatisfactory to them. Should they need help in procurement, it is probable that the next caregiver generation—boomer children

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(generations X and Y)—will be even more adept at deciphering real and virtual marketplace options as instant access to global information and communication are hallmarks of their aging cohorts. REDEFINING MEASURES OF COST AND BENEFIT IN AN INVESTMENT EQUATION The economic value of investing in chronic care and disability supports for older adults is an unsavory topic. Yet pretending it is not an underlying issue only stymies dialogue about measures of costs and benefits. The sheer size of the baby-boomer generation is predicted to double the absolute numbers of older adults with chronic care and disability needs (Johnson, Toohey, and Wiener 2007). Costs of long-term care are projected to quadruple between 2000 and 2040, with estimated costs as high as $379 billion—with one-third of that amount ($132 billion) paid for through public insurance (Allen 2005). Private costs include long-term care premiums and copayments, informal family provided care, and other costs such as in-kind and intrafamily resources transfers. Placed into an economic cost-benefit analysis, public and private financing of baby boomers’ chronic care and disability-related needs are predicted to be hefty, particularly when defined broadly (i.e., to include transportation, nutrition, assistive technology, a personal attendant, home and community care, skilled nursing, and so on). Thus long-term care is seen as posing a serious strain on both public and private budgets. If the return on long-term care spending is viewed exclusively in financial terms, most economists would suggest it is minimal at best. Thus public spending is targeted to those people who are ‘‘most vulnerable’’ or most ‘‘at risk,’’ and private long-term care insurance benefits are capped. This public and private policy approach tends to give people the minimal amount of care and support they need to get by in basic life activities. Additionally, by default, those in need of publicly insured long-term care benefits through Medicaid are either in or induced to enter poverty by virtue of Medicaid’s income and asset restrictions. The hard outcome measures of this residual policy approach are tied to immediate physical and, somewhat less often, mental health needs, with other measures that assess quality of life and life satisfaction having less salience. This approach represents a limited way to conceptualize long-term care outcomes, with the benefits it yields being limited to the restricted range of care interventions it encompasses. A more inclusive nonresidual approach would examine return on the care investment not just economically but socially and psychologically as well. Chronic care and disability supports would be provided to ensure that older adults could engage and participate in the activities and roles they desired. As such, outcome measures may evaluate care and support utilization, but they would also measure participation and social inclusion. This investment approach ideologically borrows from theories of capability (Sen 1999;

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Nussbaum 2006) and models of social return on investment (Glaeser, Laibson, and Sacerdote 2002). The aging of the baby-boom generation brings this discussion center stage. As the population of older adults diversifies, has greater expectations for engagement, finds new ways to meet its needs through technology, and is more knowledgeable about long-term care policies, there is less reason to assume older adults with chronic care and disability-related needs are unable to make contributions to their families and communities. The sheer size of the baby-boom generation makes this point more visible as the number of older adults experiencing chronic conditions and disabilities grows. The way we measure community engagement and contribution and ultimately social inclusion must be well matched with how we evaluate economic costs so that return on investment is readily seen. Small steps are being made in this direction currently that will likely serve as the foundation for investment-oriented long-term care policy. QUIET LONG-TERM CARE ‘‘INVESTMENT’’ REVOLUTIONS ALREADY UNDER WAY Despite the fact that we as a nation are functioning on de facto long-term care policies heavily reliant on informal care and supports for persons with chronic care and disability-related needs, quiet revolutions are taking place in aging and disability policy. The demographic and social trends noted above offer support for these changes, but for now the marketplace alone has not yet had enough power to generate a sea change. A powerful push has come from federal government entities in response to external and internal pressures. This is leveraging legislative and administrative change, bringing with it a new focus that is beginning to shift the nature and purpose of long-term care policy. Deinstitutionalization of Long-Term Care Over the past two decades, the combined trends of increased outpatient treatment and more quantity and greater variety of home and communitybased care have meant that more people with chronic conditions (of all ages) are living in our communities, including those with significant cognitive, physical, and emotional conditions. There are many factors that support these changes, including patterns of insurance reimbursement and consumer preferences. The industry shift toward deinstitutionalization of long-term care as public policy, however, is driven largely by civil rights rather than market interests. Compliance with the Americans with Disabilities Act (ADA) and the Supreme Court’s 1999 ruling in Olmstead v. LC has forced a radical change in course for provision of chronic care and disability supports. The Court ruling deemed mandatory institutional care to be discriminatory against

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persons with disabilities, requiring that community-based care choices must be made available to those who preferring it (Teitelbaum, Burke, and Rosenbaum 2003). This ruling paralleled years of disability rights advocacy work pushing for greater community integration and inclusion. President George W. Bush’s 2001 executive order implementing the New Freedom Initiative mandated immediate, demonstrated compliance with the Olmstead ruling by all federally funded entities (U.S. Department of Health and Human Services 2003). In less than a decade since the ruling and the order, a visible shift can be seen in federal, state, and local program directives and structures. Prime examples include ‘‘Systems Change,’’ ‘‘Real Choices,’’ ‘‘Money Follows the Person,’’ and Aging and Disability Resource Centers grants provided through the Centers for Medicare and Medicaid Services (CMS) and the Administration on Aging. Many model programs and policy demonstrations have been completed, with others still currently ongoing, such as Cash and Counseling demonstration, which is jointly funded by CMS (Centers for Medicare and Medicaid Services), DALTP (Office of Disability, Aging, and Long-Term Care Policy), and the Robert Wood Johnson Foundation (see www.cashandcounseling.org). Many of the innovations that have been produced were created through administrative regulations with minimal public or legislative discourse. For example, the 2005 Budget Reconciliation Act permits Medicaid to offer home and community-based services without a CMS waiver—prior law funded only institutionally provided long-term care (Tritz 2006). Some lawmakers are actively seeking to legislate long-term care policy changes that would codify into law program options supporting broader options for home and community-based services that keep older adults engaged in their communities. Senators Tom Harkin and Arlen Spector have taken the lead, introducing the Community Choice Act of 2007 (GovTrack 2008). Addition of Social and Economic Outcomes Deinstitutionalization efforts, whether explicitly stated or not, tend to have outcome measures that go beyond function and health and begin to examine engagement and inclusion. For many Medicaid beneficiaries with chronic conditions and/or those experiencing disability, provision of care and supports facilitate engagement in family, community, and work roles. In the past, this has been a more vocalized aim of younger persons with disabilities, but with the noted role expansion, it is increasingly an aim of older adults as well (Stevens-Ratchford and Diaz 2003). This can be seen in the redesign of Medicaid’s insurance coverage for younger and older persons with disabilities through its waiver options and demonstration programs (e.g., Waivers 1115c and 1918b, Cash and Counseling). These programs have increased the level of choice and control beneficiaries have in selecting and using supports and services within home and community-based care.

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For many beneficiaries, this has meant having more opportunity to ensure formal care and supports that complement existing informal and personal resources. When redundancy is decreased, resources are freed to facilitate larger social and economic goals. For example, in the Cash and Counseling program, a person unable to prepare meals may have them delivered by a relative instead of cooked by a chore worker paid for by Medicaid insurance. Funds saved may be applied to cover transportation costs to volunteer engagements instead. A more explicit example of this hybrid purpose is the Social Security Administration’s (SSA) Ticket to Work program, which permits continuation of Medicare health insurance for persons with disabilities returning to the formal workforce without employer provided health insurance (see http:// www.ssa.gov/work/aboutticket.html). This program has had limited success, however, as states have reduced their Medicaid partner funding (which pays for long-term care) in the face of competing budget priorities, and persons with disabilities have had difficulty in sustaining employment due to medical reasons or nonreceptive working environments (Craig et al. 2007). Despite these challenges, the multipurpose or coordinated program aims are becoming more of a focus of CMS’s and SSA’s long-term disability policies (Social Security Advisory Board 2006). Public Bolstering of Informal Care and Private Long-Term Care Insurance Slowly we are seeing shifts in the valuation of informal care provided by family members to older adults with chronic care and disability-related needs. As caregiving costs have become better measured, offsets have gradually appeared in various forms, including state tax credits, caregiver wages, and in-kind caregiver supports (including the Administration on Aging’s Family Caregiver Support Program and state and local programs). Information and assistance for caregivers and persons with chronic care, disability, and long-term care needs are also of elevated priority. Single-entry points into finding and using care and services meant to reduce consumer burden are appearing across the nation, for instance, in the form of Aging and Disability Resource Centers and the United Way’s central call number 211. These centralized information centers are intended to support informal caregivers and help enable many states to better leverage private supports to reduce unnecessary Medicaid-funded nursing home admissions (see www.aoa.gov and www.211.org). Perhaps unintentionally, yet in tandem, reforms in private long-term care insurance are being introduced. To this point, long-term care insurance has been largely unregulated and unstable, and coverage has often been hard to access (Kofman and Thompson 2004). One solution being proposed in several states is public-private partnerships that create ‘‘tiered’’ insurance schemes with private insurance as the primary insurer (until exhausted)

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followed by public insurance (Medicaid) as the second insurer. Under some proposals, private insurance premiums are 100 percent tax deductible, and asset caps for Medicaid eligibility are raised to match the amount of private insurance coverage purchased (http://www.rwjf.org/files/publications/other/ Longtermcare_052007.pdf). The bolstering of private resources creates a stronger market orientation of long-term care, which as noted earlier is creating strong consumer constituencies. To the extent that private resources offer greater flexibility and independence to older adults and support to families in meeting chronic care and disability needs, these are seemingly positive developments. Institutionalizing Role Changes in Old Age While changes in Medicaid, caregiver, and long-term care insurance policies have targeted audiences, the Older Americans Act has a universal mandate to facilitate health and well-being for all adults over age 60. Through its continued reauthorization and funding, the OAA has built a thin national infrastructure of supports to facilitate health and wellness, social engagement, and economic participation for over forty years. Resolutions coming from the 2005 White House Conference on Aging extend its programmatic reach farther than ever before by including as a priority issue the creation of meaningful volunteer and civic engagement experiences for older adults. The 2006 reauthorization of the OAA reflected this broadened agenda to foster inclusion and participation of older adults in our communities. As noted in the introduction to this chapter, however, the budget allotted for OAA programs remains proportionally small in relation to the number of persons eligible for them. Thus, while ideologically significant, minimal funding is available to develop new or model programs. Related programs that would facilitate community participation and engagement for persons with chronic care and disability-related support needs such as transportation, home modifications, and the development of livable communities allowing persons to age in place are also short on funding. This, then, is perhaps the cusp of institutionalizing role changes in old age that emphasize social inclusion. While the Administration on Aging’s Strategic Action Plan for 2007–2012 continues to stress meeting the more basic needs of older adults, the extended scope of the Older Americans Act suggests a wider focus for funding is possible in the future (U.S. Department of Health and Human Services 2007b). PRECURSORS, EXPECTATIONS, AND INFLUENCES ON ADOPTION OF AN INVESTMENT APPROACH TO LONG-TERM CARE A positive discussion of long-term care policy as an investment in baby boomers and future generations hinges on a reduction in the prevalence of

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FIGURE 13-1. Policy Timeline Leading to Discussions of Long-Term Care Sources: Disability Social History Project, Social Security Administration, Rehabilitation Research and Training Center on Independent Living Management, Temple University.

the belief that people experiencing chronic conditions and disability have less to offer or contribute to our communities than people not experiencing these conditions. Without this attitudinal change, selling chronic care and disability supports as continued investments in the human capital of older

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adults will continue to be an extremely difficult challenge. Additionally, prejudice and discrimination based on age must be reduced. If old age is thought to be synonymous with disability and/or stagnant development, arguments for investment in individuals across the life course are equally problematic. Extending the purpose of providing chronic care and disability supports beyond medical needs to also include social participation and engagement as primary goals addresses a growing concern about social inclusion. Arguably this is becoming a more defined interest of older adults, albeit stated in softer terms and restricted to specific activities, such as the emphasis on volunteering and civic engagement as noted above. Figure 13-1 presents a selected list of health, aging, and disability policy events set against the lifetimes of three generations—the parents of baby boomers, baby boomers, and baby boomers’ children. It shows both steady, incremental development of social welfare policies supporting older adults and persons with disabilities as well as some significant leaps forward in these policies over the lifetime of the baby boomers’ parents. When viewing this trajectory, it appears we are slowly heading toward wider discussions of long-term care. Whether or not the aging of the baby-boom generation will jump-start political and policy discourse is unclear. It seems unlikely that we will see the creation of any new entitlement program for older adults until concerns about the financial futures of Social Security and Medicare are addressed. However, given their legal directive, we should expect that the current ‘‘quiet revolutions’’ in long-term care will continue within Medicaid. Perhaps we will also see some extension of long-term care benefits within Medicare (see chapter 12 in this volume). Additionally, pressures may continue to build for the improvement of caregiver supports and reform of private long-term care insurance. In all of these efforts, we have the choice to revalue the benefit of long-term care as an investment in baby boomers and future populations of older adults. This seems a topic worthy of significant discussion. REFERENCES Administration on Aging. 2007. Legislation and budget. Available at http://www. hhs.gov/budget/07budget/aoa.html. Allen, K. 2005. Long-term care financing: Growing demand and cost of services are straining federal and state budgets. Testimony presented on April 27, 2005, before the Subcommittee on Health, Committee on Energy and Commerce, House of Representatives. Available at http://www.gao.gov/new.items/d05564t.pdf. Cai, L., and J. Lubitz. 2007. Was there compression of disability for older Americans from 1992 to 2003? Demography 44 (3): 479–95. Centers for Disease Control and Prevention. 2007. Life expectancy at birth at 65 years of age, and at 75 years of age, by race and sex: United States, selected years 1900–2004 (Table 27). Available at http://www.cdc.gov/nchs/data/hus/ hus07.pdf#fig18.

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Cohen, M. 2003. Private long-term care insurance: A look ahead. Journal of Aging and Health 15 (1): 74–98. Coronel, S. 2004. Long-term care insurance in 2002. Washington, DC: America’s Health Insurance Plans. Freedman, M. 2006. The social-purpose encore career: Baby boomers, civic engagement, and the next state of work. Generations 30 (4): 43–46. Freedman, V. A., E. M. Agree, L. G. Martin, and J. C. Cornman. 2006. Trends in the use of assistive technology and personal care for late-life disability, 1992–2001. Gerontologist 46 (1): 124–27. Gibson M. J., and A. N. Houser. 2007. Valuing the invaluable: A new look at the economic value of family caregiving. AARP Issue Brief 82. Available at http:// www.assets.aarp.org/rgcenter/il/ib82_caregiving.pdf. Glaeser, E., D. Laibson, and B. Sacerdote. 2002. An economic approach to social capital. Economic Journal 112 (483): F437–F458. GovTrack. 2008. S. 799: Community Choice Act of 2007. Http://www.govtrack.us/ congress/bill.xpd?bill=s110-799. Johnson, R., D. Toohey, and J. Wiener. 2007. Meeting the long-term care needs of the baby boomers: How changing families will affect paid helpers and institutions. Retirement Project. Washington, DC: Urban Institute. Kemp, B., and L. Mosqueda. 2007. Introduction to Aging with disability: What the clinician needs to know, ed. B. Kemp and L. Mosqueda, 1–8. Baltimore: Johns Hopkins University Press. Kofman, M., and L. Thompson. 2004. Consumer protection and long-term care insurance: Predictability of premiums. Georgetown University Long-Term Care Financing Project. Available at http://www.ltc.georgetown.edu/pdfs/consumer.pdf. Lusardi, A., and O. Mitchell. 2007. Baby boomer retirement security: The roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics 54 (1): 205–44. National Governors Association. 2007. The fiscal survey of states. Available at http://www. nasbo.org/Publications/PDFs/Fiscal%20Survey%20of%20the%20States%20June% 202007.pdf. Nussbaum, M. 2006. Frontiers of justice: Disability, nationality, species membership. Boston: Harvard University Press. Sen, A. 1999. Development as freedom. Oxford: Oxford University Press. Smith, V., K. Gifford, E. Ellis, A. Wiles, R. Rudowitz, and M. O’Malley. 2005. Medicaid budgets, spending and policy initiatives in state fiscal years 2005 and 2006: Results from a 50-state survey. Kaiser Commission on Medicaid and the Uninsured. Available at http://www.kff.org/medicaid/upload/Medicaid-Budgets-Spending-and-PolicyInitiatives-in-State-Fiscal-Years-2005-and-2006-report-executive-summary.pdf. Social Security Advisory Board. 2006. A disability system for the 21st century. Washington, DC: Social Security Administration. Available at http://www.ilr.cornell. edu/edi/publications/PolicyForum/PolicyForum-Bios_2007-01-12.pdf. Soldo, B., O. Mitchell, R. Tfaily, and J. McCabe. 2006. Differences in health on the verge of retirement. National Bureau of Economic Research (NBER) Working Paper No. 12,762. Cambridge, MA: NBER. Stevens-Ratchford, R., and T. Diaz. 2003. Promoting successful aging through occupation: An examination of engagement in life; A look at aging in place, occupation and successful aging. Activities, Adaptation & Aging 27 (3/4): 19–37.

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Teitelbaum, J., T. Burke, and S. Rosenbaum. 2003. Olmstead v. L.C. and the Americans with Disabilities Act: Implication for public health policy and practice. Public Health Report 119 (3): 371–74. Thornton, C., G. Livermore, T. Fraker, D. Stapleton, B. O’Day, D. Wittenburg, R. Weathers, N. Goodman, T. Silva, E. Martin, J. Gregory, D. Wright, and A. Mamun. 2007. Evaluation of the Ticket to Work Program: Assessment of PostRollout Implementation and Early Impacts, Vol. 1. Princeton: NJ: Mathematica Policy Research, Inc. Tritz, K. 2006. Medicaid’s home and community-based services state plan option: Section 6068 of the Deficit Reduction Act of 2005. Washington, DC: Congressional Research Service. Available at http://www.nacdd.org/images2/pdfs/ CRS%20report%20HCBS%20Option.pdf. U.S. Department of Health and Human Services. 2003. The New Freedom Initiative. Http://www.hhs.gov/newfreedom/init.html. ———. 2007a. Medicare Coverage. Available at http://www.medicare.gov/Coverage/ Home.asp. ———. 2007b. U.S. Administration on Aging strategic plan, 2007–2012. Available at http://www.scribd.com/doc/356862/AoA-Strategic-Action-Plan-20072012. Wilson, L., and S. Simson, eds. 2006. Civic engagement and the baby boom generation: Research, policy, and practice perspectives. New York: Haworth Press.

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Differential Treatment by Age: Age Discrimination or Age Affirmation? JOHN MACNICOL

S

ince its hesitant beginnings in the early years of the twentieth century, the discipline of gerontology has grown and flourished, influencing many areas of social and public policy (Achenbaum 1995; Katz 1996). It has concerned itself with improving the lot of older people, campaigning for better social security and pension provision for those who have retired from labor market activity or child care duties. It has sought special recognition and resource allocation for the particular health care needs of older people, via geriatric medicine. It has exposed the conditions under which many old people have to live when in institutional care. And it has countered the negative portrayal and treatment of older people in all areas of social life, including the discriminations they suffer merely on account of their age. At a grassroots level, many organizations of older people themselves—often collectively termed the ‘‘gray lobby’’—have likewise pressured governments to recognize the particular needs of old age. Old people have never been passive victims: they have always campaigned for their rights (Pratt 1976; Blaikie 1990). In doing so, campaigners have operated from a position that is often seen as inherently contradictory. On the one hand, many gerontologists wish to dispense with age as a categorization and work toward an ‘‘age-irrelevant,’’ ‘‘age-neutral,’’ or ‘‘ageless’’ society—one in which individuals will be judged by the content of their character, and not according to their chronological age. Examining old age as a discrete period is held to be misguided since no

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physical or cognitive significance can be attached to the age of 65, which emerged from the late nineteenth century onward as the age at which most state pensions were paid. Quite rightly, defining one particular age as the onset of ‘‘old age’’ is often criticized for being too much based upon biomedical or welfarist approaches. Interestingly, many gray lobby pressure groups have rejected such rigid demarcations, believing that the young, middleaged, and old should work together for a common cause: the old are ‘‘our future selves.’’ For example, campaigns by labor organizations or unmarried women in the United Kingdom in the 1920s and 1930s sought a reduction in the state pension age to 60 or even 55, as a recognition of the diminishing incomes suffered by many working-class people in late middle age. And in the United States, membership in AARP (formerly the American Association of Retired Persons) is open to all above the age of 50. Yet while pleading the cause of ‘‘agelessness,’’ gerontology demarcates old age as a protected territory, and argues for greater resource allocation to the end of the chronological life course via policies that ‘‘single out, stigmatize and isolate the aged from the rest of society’’ (Estes 1979, 2) in a way that can be seen as subtly ageist (Bytheway 1995, 97). The alternative suggested by newer life course perspectives is to dispense with the idea of the life cycle (since it is held to be inherently ageist to divide life into discrete stages) and to examine aging as a long and gradual process from birth to death, affected by such cross-cutting variables as class, gender, and ethnicity. However, this approach is scarcely more helpful, since controlling for all the variables involved would present a task so challenging as to be well-nigh impossible. As the large baby-boom cohorts pass across the age-65 frontier in all advanced industrial societies, this central dilemma is moving beyond the pages of gerontology texts and becoming a major problem of social policy: Should we dispense with differential treatment by age, in the name of antiageism? Should we recognize that it is absurd to identify the age of 65 as the threshold of ‘‘old age’’? Should state pension ages be raised, given that health status and working capacity must have improved? Should public policies become needs based rather than age based? Or should we acknowledge old age as a separate and potentially vulnerable stage of life that requires statutory protection via age-based policies (Neugarten 1982)? In rejecting biological determinism, many gerontologists argue that it is necessary to distinguish between different kinds of ‘‘time’’ or ‘‘age.’’ Chronological age (or ‘‘calendar time’’) refers quite simply to an individual’s date of birth and involves an interaction between biographical time (an individual’s life history) and historical time (the historical context within which an individual ages, affected by different cohort and generational experiences). Social age encapsulates socially ascribed identity or status differentiation by age, according to the age norms, age expectations, age-appropriate behaviors, and age divisions that prevail in any particular society at any given point in time, and are strongly internalized. Physiological or biological age

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denotes one’s physical or cognitive status, as measured by tests of functional ability, mobility, strength and dexterity, bone density, organ reserve, intellectual performance, and so on. Finally, psychological age is an individual’s selfassessment of his or her own age. Chronological age per se is therefore meaningless: it is always mediated through prevailing social attitudes, ideologies, and structured inequalities and only attains significance in a particular cultural setting. In certain contexts, the biology of aging can be subject to a radical reevaluation. For example, in both the United Kingdom and the United States, the economic recession and high unemployment of the 1930s caused older workers to be judged industrially obsolescent, and the prevailing view was that they should be encouraged to leave the labor market in the name of economic efficiency. Yet once World War II had begun, labor shortages necessitated the retraining of older workers for key skilled positions in the wartime economy, and their importance was fully acknowledged. Indeed, in both countries the perceived value of older workers has changed over the past seventy years, with pendulum-like swings in the 1930s, 1970s, and 1980s. When technological innovation and economic restructuring necessitated workforce downsizing, the emphasis was on encouraging their early exit from the labor force; yet since the 1990s, the emphasis has been as it was in the 1950s and 1960s, on expansion of labor supply, with the economic contribution of older workers greatly valued via policies aimed at their labor force retention. Many other examples could be cited where historically contingent circumstances have profoundly affected the social construction of old age.

THE IMPORTANCE OF AGING AND OLD AGE Studying old age is important for a variety of reasons. First, the aging process affects us all and is a source of constant fascination. It is deeply ingrained in our patterns of thought: we all live by ‘‘social clocks’’ that determine the ‘‘right’’ time to leave school, start work, marry, become a parent, retire, and so on (Neugarten 1996). So much of our popular culture is age based, and age is a vital element in the construction of individual identity. At both the macro level of society at large and the micro level of the extended family, we are enmeshed within complex hierarchies of age that profoundly affect our sense of self. Second, old age and death present enormous spiritual and existential challenges (Cole 1992). Not surprisingly, mankind has always been intrigued by longevity, and even today medical breakthroughs that promise to extend life are newsworthy. The debate between biologists (who argue that, if only cell deterioration could be delayed, human beings could live for hundreds of years) and demographers (who argue that the maximum human life span is probably fixed at about 120 years) is at the core of aging studies.

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Interestingly, old age is also a major reason for the existence of advanced welfare states, since the cost of social security and health care for older people is one of the largest items in welfare budgets. Western societies face the prospect of aging populations from the second decade of the twenty-first century, necessitating large increases in health and social care expenditure. For example, in the United Kingdom, a recent estimate is that cases of dementia may rise from 560,000 at present to 1,400,000 by 2051 (National Audit Office 2007). Much will depend on the uncertain balance of positive and negative forces determining health status in old age: positive factors (such as improvements in medical technology) may be offset by negative ones (such as a rising incidence of obesity). Age is also a powerful social division, a determinant of many social phenomena, and the basis for social judgments (even if this is insufficiently acknowledged). The age structure of a population is one variable that affects its social characteristics: for example, youthful populations have a high propensity toward criminal behavior, unemployment, violent or traumatic deaths, out-of-wedlock births, and other social problems potentially more expensive than pension systems. Finally, age is a source of discrimination. Indeed, many argue that ageism is as damaging and corrosive as racism or sexism, even if it may be qualitatively different, more complex and subtle—and therefore more problematic to demonstrate. The problem of age discrimination has also been addressed somewhat belatedly in Western societies. In order to understand why this is so, one needs to consider the meanings of discrimination in general and age discrimination in particular. SOME PROBLEMS INHERENT IN DISCRIMINATION All discrimination involves the application of assumed group characteristics to an individual, regardless of that individual’s actual personal characteristics. A class of persons is identified, and all its members are assumed to have similarity. Such generalizations may have a rough accuracy, but they overlook the diversity and difference that exists within members of that class. Much depends upon the accuracy of the generalization. The modern meaning of discrimination is intimately associated with the slow transition to liberal-democratic capitalist societies, with greater emphasis on individual rights. In the nineteenth century, both the United Kingdom and the United States possessed quasi-feudal social structures. There were very wide disparities of wealth and income, upward social mobility was restricted, only a few adult males possessed the right to vote, and inequality before the law (for example, with regard to women or ethnic minorities) was accepted. Discrimination was widespread and little commented on. The idea of individual rights was therefore undeveloped, and the term discrimination had a neutral meaning—to ‘‘differentiate.’’

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However, the spread of democracy over the past hundred years has solidified individual rights and transformed our conceptualization of discrimination. It has taken on normative meanings, both positive and negative. Negative discrimination implies that harm is inflicted by one individual on another via a restriction of their rights; it can also be ‘‘a social pattern of aggregate behavior’’ inflicted by one group upon another (Banton 1994, 5). Discrimination is viewed as an aberration in modern liberal-capitalist societies, which pay lip service to the principle of equality of opportunity. However, legislative action against discrimination still tends to apply only to the public sphere—in areas such as employment, education, housing, or selection for public office. In our private worlds, we still enjoy considerable freedom to discriminate by making choices based upon our preferences or even prejudices—for example, in selecting friends or an area in which to live. There are also two other elements in the modern meaning of discrimination— particularly employment discrimination—that raise thorny issues. First, it has long been a central principle of free market economics that discrimination is logically impossible in a truly capitalist economy. In conditions of perfect market competition, it is argued, an employer would always behave rationally, and it would be economically irrational to select an employee on productivityirrelevant qualities such as gender, race, religion, or age: an employer’s profits would suffer in consequence (Epstein 1992, 445, 452). Of course, in the real world, as opposed to the hypothetical abstraction of a pure market economy, an employer may indeed be willing to suffer some drop in profits in order to indulge his or her ‘‘taste for discrimination’’—quite how much of a drop is the key question (Becker 1957, 6). Nevertheless, the argument emanating from free market economists is interesting and can instructively be adapted. While they would maintain that discrimination has naturally lessened as capitalism has evolved, it can just as convincingly be argued that state policies against employment discrimination are an essential part of the transition to a more competitive free market economy. It is interesting that in the United Kingdom and the United States, effective laws against employment discrimination are a post-1960s phenomenon, coinciding with the move away from a manufacturing-based economy and toward a more service-oriented and white-collar employment base with more insecure, ‘‘flexible’’ jobs and a culture of competitive individualism that has characterized Western economies in the last forty years. Second, most definitions of employment discrimination maintain that true discrimination occurs when a personnel decision is made on grounds other than productivity. If a personnel decision can be proven to be productivity related, the likelihood of discrimination diminishes considerably (and, in the legal process, the onus of proof then falls on the plaintiff). A commonly cited instance is the workplace policy of ‘‘no beards.’’ If this were to exist for health and safety reasons, it would not be considered discriminatory; if, however, it merely reflected the prejudices of an employer against

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Sikh men, it would be discriminatory. Employment discrimination laws do not prevent employers from firing employees who are unproductive. Indeed, such laws may be a way of streamlining workforces and improving productivity by ensuring that employment decisions are made on rational economic grounds. Only the most economically valuable workers are hired and retained. Outlawing ‘‘irrational’’ employment discrimination certainly solidifies individual rights, but it also maximizes economic efficiency. Both of the above points need to be borne in mind when considering action against age discrimination. The late twentieth-century ‘‘discovery’’ of age discrimination and consequent legislative action may signal a new recognition of the rights of older people. On the other hand, it may—paradoxically—herald an era in which age protection is diminished, state pension ages will rise, and there will be workfarist policies designed to force older people into the kinds of new low-grade, poorly remunerated jobs that modern economies are generating. That is the dilemma.

AGEISM AND AGE DISCRIMINATION IN EMPLOYMENT Ageism is generally taken to denote those attitudes, actions, and vocabularies that serve to accord people a diminished social status solely by reference to their age. To pass judgment on an individual, and thereby define his or her social worth, on the basis of a morally irrelevant characteristic such as age is held to be an affront to natural justice. As Erdman Palmore (1999, 7–8) has argued, ‘‘The democratic ideal is that each person should be judged on the basis of individual merit rather than on the basis of group characteristics such as race, sex and age.’’ Although ageism can of course apply at any age, it is when it is directed at older people that it seems most objectionable. It is manifest in everyday linguistic expression, discourses, jokes, visual imagery, advertising, fashion, patterns of thinking, popular culture, and so on. Contemptuous epithets like ‘‘mutton dressed as lamb,’’ ‘‘old codger,’’ or ‘‘greedy geezer’’ are all too commonplace. Ageism as a concept is of relatively recent origin (although prejudice against older people has long been researched), dating from Robert Butler’s celebrated invention of the term in 1969 (Butler 1969). It therefore drew inspiration from the civil rights agitation of the 1960s and has infused the discipline of gerontology ever since. By contrast, age discrimination in employment has a very long history: there has been discussion since at least the 1930s of the question of whether the labor market disadvantages of older workers are caused primarily by discrimination per se or by other factors (notably economic restructuring and a contraction of those labor market sectors with high age profiles). Bodies such as the U.S. Department of Labor and the International Labour Organization researched the problems of older workers in the 1930s, including the discrimination they faced.

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Age discrimination in employment involves the use of crude age proxies in personnel decisions relating to hiring, firing, promotion, demotion, retraining, (possibly) remuneration, and (most controversially) mandatory retirement. It is held to be inherently ageist to base individual personnel decisions upon age-based generalizations, since age is by itself not an accurate proxy for productivity. A truism in gerontology is that heterogeneity in health status and cognitive ability increases as cohorts age, rendering the use of age proxies morally dubious and economically dysfunctional. Ageism is arguably more complex and nuanced than other forms of discrimination. Considerable debate has raged over its inherent dilemmas and contradictions (Nelson 2002; Macnicol 2006; Bytheway 2005). An immediate difficulty is whether ageism is like sexism or racism, and therefore whether it can be successfully combated by equal-opportunities legislation (Palmore and Manton 1973). Race and sex are often said to be immutable or unchanging characteristics, whereas age is a relative characteristic: it is arguably much more difficult to define victim and perpetrator in the case of the latter than the former. This is a particular problem if age discrimination laws apply at any age, since all citizens will be in the protected group. Indirect discrimination (discrimination that is not obvious, but that impacts adversely on a particular class of individuals) can be more difficult to demonstrate in the case of age: for example, the age profile of a firm will be determined by factors other than discrimination, and therefore statistical discrimination tests cannot be probative. Again, age discrimination in employment is often viewed as essentially irrational and prejudice-driven, perhaps stemming from employers’ deep-seated fears of their own aging, decrepitude, and death. Employers may also suffer from ‘‘structural lag’’ in holding erroneous views about older workers’ negative characteristics (absenteeism, slowness, skills deficiencies, unfamiliarity with new technology, and so on). However, many apparently ageist personnel policies may have a rational basis, such as the higher salary costs of an older employee or the fewer potential years of work that they can offer a firm (Levine 1988). The use of age proxies in personnel decisions may also be cheaper, more convenient, and less controversial than individual performance appraisal, just as mandatory retirement at age 65 treats every employee similarly, via a kind of rough justice (Palmore 1972). A difficult problem is that there is a balance of positive and negative discriminations across the life course, and at any point in the life course. Much depends upon whether one takes a ‘‘synchronic,’’ instantaneous perspective or a ‘‘diachronic,’’ life span one (Daniels 1989). Health care allocation is an apposite example. There are many justified allegations that old people suffer negative discrimination in health care, as in a recent debate in the United Kingdom about the rationing of early-stage Alzheimer’s drugs such as Aricept. However, it must also be recognized that, over the past fifty years, the proportion of health care expenditure allocated to old people has steadily risen in all Western societies. Illness management regimes (notably, through pharmaceuticals) have

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been so successful at lowering mortality and controlling morbidity in the young and middle-aged that all medicine is increasingly becoming geriatric medicine. It is possible to argue, therefore, that old people enjoy substantial positive discrimination in health and social care resource allocation. There is no doubt that certain age restrictions are widely supported and approved. These would include concessions to older people (such as free or subsidized public transport), laws that protect the young, age-based school curricula, mandatory retirement ages for civilian airline pilots, and so on. A major conceptual difficulty in analyzing age discrimination is deciding exactly at what point our strongly internalized and widely accepted notions of ‘‘age-appropriate’’ behaviors become discriminatory. Is the choosing of friends or emotional partners of a similar age rational (based upon common interests or similar anticipated remaining life years), or is it discriminatory? Certain age divisions are considered reasonable and therefore widely accepted. In the rush to outlaw all ageism and age discrimination, should we dispense with age as a category? Or should we embrace age differences, just as we celebrate diversity and difference in other aspects of society? Most of us enjoy living in a pluralistic, multicultural society (which offers us a much greater variety of music, restaurants, clothing styles, accents, and so on). To an extent, we also enjoy whimsically stereotypical images of ethnic diversity. Hopefully, we also appreciate living in an ‘‘age diverse’’ society, with age-based demarcation lines, and may thus occasionally enjoy slightly ageist stereotypes (most notably, the curmudgeonly characters in British television series like One Foot in the Grave or The Last of the Summer Wine). Age divisions and the complex working-out of intergenerational tensions also constitute a central theme of much popular culture and many television soap operas, such as The Fresh Prince of Bel-Air, Frasier, Eastenders, or Neighbours (hence, perhaps, their popularity with teenage children). There is, of course, a fine line between such good-humored, lighthearted stereotyping and overt racism, sexism, or ageism, and where that line should be drawn is the critical issue. CURRENT POLICY IN THE UNITED KINGDOM These dilemmas and difficulties are very evident in current policy in the U.K. and Britain, where two seemingly contradictory forces are at work. On the one hand, legislation outlawing age discrimination in employment (via the 2006 Age Regulations) has belatedly been introduced (some forty years after the United States’ 1967 Age Discrimination in Employment Act) to provide improved employment protection and largely outlaw compulsory retirement before the age of 65 (unless ‘‘objectively justified’’). The likelihood is that very soon retirement ages will be abolished for all but a few occupations. This has ostensibly been done as an enhancement of older people’s ‘‘rights’’ and to remove the age-discriminatory barriers that allegedly worsen their employment opportunities. Interestingly, though, the first successful

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age discrimination case was brought by a woman discriminated against for being too young (Shaikh 2007). Yet, on the other hand, more vigorous steps are being taken to push older economically inactive people into employment, as part of the ‘‘responsibilities’’ agenda. The British government has set a target of getting a million more people aged 50 and over back into work, as part of its aim of achieving an overall employment rate of 80 percent among people of working age. To this end, reforms of Incapacity Benefit (a major source of income for jobless older men, particularly in deindustrialized areas) are being implemented to make claiming it more difficult. Workfare will undoubtedly become more proactive in the future, with greater sanctions being applied to benefit claimants of all ages (Freud 2007). In addition, following the recommendations of the Pensions Commission (chaired by Lord Turner) the decision has been made to raise the state pension age incrementally to 68 by 2046. Interestingly, the Pensions Commission argued that improving life expectancy at age 65 justified raising the state pension age, thereby articulating for the first time an entirely new principle—that people shall only be allowed, on average, a fixed period of time in pension-funded retirement. This radical change has been little debated in the United Kingdom, but arguably it represents a significant erosion of the welfare rights of older people. The ostensible reasons for this policy shift are several, and they relate to the economic challenge posed by the baby-boom generation moving into retirement. First, the United Kingdom faces the prospect of an aging population from the second decade of the twenty-first century, with the proportion of the 65-and-over population projected to rise from 16 percent at present to 23 percent by 2031. Projections suggest that by 2022 there will be three million more people of working age over the age of 50, and a million fewer under the age of 50, making it imperative that everything possible be done to improve the job prospects of older workers (Whiting 2005, 287). As with all population forecasting, however, there is much uncertainty over future trends in birthrates, life expectancy at age 65, and immigration— so much so that, at the time of writing, projections for the size of the UK population are regularly being revised upward, owing to unexpectedly high levels of immigration. An increase in population size from sixty million now to more than seventy million by 2051 is being projected, and, since these extra numbers will mainly be in the younger age groups, the demographic problem posed by the baby boomers will be lessened: the tax base will expand and National Insurance revenues will increase. Second, there was a fall in the employment rates of British men aged 50 and over from the early 1970s to the mid-1990s, and only a small rise in those of women. Although older people’s employment rates have risen since 1994, as a consequence of an improving economy, it is still the case that one in three British people between 50 and state pension age is jobless. A future economic downturn could cause their employment rates to fall again.

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A third reason for encouraging increased labor force activity of older people is the perceived need to improve the basic state pension, combined with (as already indicated) a raising of the state pension age. In addition, falling stock market values have caused many final-salary occupational pension schemes to close, and the incomes yielded by money-purchase schemes are generally inadequate. Unless older people are to languish on other welfare benefits until the age of 68, they will have to be retained longer in their existing jobs, and (perhaps rather unconvincingly) protection against age discrimination in employment is seen as one way of achieving this (Department for Work and Pensions 2006, 65–66). There is also some concern over loss of skills through early retirement. A final impulse behind the push to extend working lives is the New Labour government’s broader macroeconomic strategy of expanding labor supply and achieving noninflationary economic growth by lowering employers’ wage costs. As a recent government report on combating age discrimination argues, ‘‘More people competing for jobs means that people are less keen to demand wage increases’’ (Cabinet Office 2000, 39). What are prospects for getting the baby boomers to work later in life? The United States has had its Age Discrimination in Employment Act since 1967, and this Act has been subject to several important amendments (notably the uncapping of the mandatory retirement age for nearly all occupations) that have undoubtedly improved job protection for older workers. However, it may not have had much effect on older people’s labor force participation rates, despite claims made for it (Adams 2004), since these have fallen since the 1970s and risen slightly since the mid-1990s in precisely the way they have in other industrialized countries (Macnicol 2007, 35–39). Compared with the European Union, the United States displays less inclination to apply labor market activation to older people: there, fertility rates are higher, population growth is faster, and Social Security appears relatively more solvent (Rix 2006, 10–11). Since the 1930s, the labor force participation rates of older American men have been markedly higher than those in the United Kingdom; for example, the rate for men aged 65 and over was 17.7 percent in the United States (in 2000) compared with only 7.5 percent in Britain (in 2001) (Macnicol 2007, 36). The current policy prescriptions in the United Kingdom appear to be limited almost exclusively to supply-side solutions, yet the employment difficulties of older people have been caused more by lack of labor market demand. In other words, while there exists a minority of middle-class early retirees who have chosen to leave the labor force before the age of 65 because of relatively generous occupational pensions, the majority of early retirements are blue-collar and involuntary, caused by the disappearance of a job or by ill health (Whiting 2005, 287–88). An analysis of older workers’ joblessness predicated on the assumption that age discrimination is the principal cause is one that is confined to the level of the individual firm, locating the

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problem as arising from the ‘‘prejudices’’ of employers: the rather limited solution is seen as effecting a ‘‘cultural change’’ by disabusing employers of their age-discriminatory attitudes. However, the real cause is the complex supply-demand mismatches of age, gender, skill, region, and sector that have always characterized modern economies and have intensified since the 1970s. For example, there are pronounced regional variations in the employment rates of people aged between 50 and state pension age: the highest levels of older people’s joblessness are in the economically depressed, deindustrialized areas such as Wales and the North East of England. Again, part-time working and self-employment become more pronounced with every year after the age of 50: two-thirds of men who still work after age 65 do so part-time, and four out of ten are selfemployed. Part-time jobs have increased massively in the British economy since World War II—from 831,000 jobs in 1951 to 7,412,000 in 2006—and it seems likely that much future employment growth will be on this basis, and at the bottom end of the labor market. It is difficult to see how this can form a viable basis for later-life employment. CONCLUSION Differential treatment by age has hitherto protected older people via age-based social security and other entitlements—admittedly, sometimes at the cost of ghettoizing and marginalizing old age and encouraging the non-old to view our elders as a passive, unproductive fiscal burden. Yet the removal of such agebased protections in the name of ‘‘agelessness’’ and as part of a superficially appealing strategy of countering age discrimination carries equal dangers—that of returning to a nineteenth-century old-age experience, in which many poorer citizens will be compelled, through economic necessity and the withdrawal of pension support, to work later in life at low-paid, menial jobs. Such coercion would be a high price to pay for the achievement of an ‘‘ageless society.’’ REFERENCES Achenbaum, W. 1995. Crossing frontiers: Gerontology emerges as a science. Cambridge: Cambridge University Press. Adams, S. 2004. Age discrimination legislation and the employment of older workers. Labor Economics 11 (2): 219–41. Banton, M. 1994. Discrimination. Buckingham, UK: Open University Press. Becker, G. 1957. The economics of discrimination. Chicago: University of Chicago Press. Blaikie, A. 1990. The emerging political power of the elderly in Britain, 1908–1948. Ageing and Society 10 (1): 17–39. Butler, R. N. 1969. Age-Ism: Another form of bigotry. Gerontologist 9 (4): 243–46. Bytheway, B. 1995. Ageism. Buckingham, UK: Open University Press. ———. 2005. Ageism. In The Cambridge Handbook of Age and Ageing, ed. M. L. Johnson, 338–45. Cambridge: Cambridge University Press.

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Cabinet Office. Performance and Innovation Unit. 2000. Winning the generation game: Improving opportunities for people aged 50–65 in work and community activity. London: The Stationery Office. Cole, T. R. 1992. The journey of life: A cultural history of aging in America. Cambridge: Cambridge University Press. Daniels, N. 1989. Justice and transfers between generations. In Workers versus pensioners: Intergenerational justice in an ageing world, ed. P. Johnson, C. Conrad, and D. Thomson, 57–79. Manchester, UK: Manchester University Press. Department for Work and Pensions. 2006. A new deal for welfare, Cm. 6730. London: The Stationery Office. Epstein, R. A. 1992. Forbidden grounds: The case against employment discrimination laws. Cambridge, MA: Harvard University Press. Estes, C. 1979. The aging enterprise. San Francisco: Jossey-Bass. Freud, D. 2007. Reducing dependency, increasing opportunity: Options for the future of welfare to work. An independent report to the Department for Work and Pensions. London: Department for Work and Pensions. Katz, S. 1996. Disciplining old age: The formation of gerontological knowledge. Charlottesville: University Press of Virginia. Levine, M. L. 1988. Age discrimination and the mandatory retirement controversy. Baltimore: Johns Hopkins University Press. Macnicol, J. 2006. Age discrimination: An historical and contemporary analysis. Cambridge: Cambridge University Press. ———. 2007. The American experience of age discrimination. In The future of older workers: New perspectives, ed. W. Loretto, S. Vickerstaff, and P. White, 27–41. Bristol, UK: Policy Press. National Audit Office. 2007. Improving services and support for people with dementia. London: The Stationery Office. Nelson, T. D., ed. 2002. Ageism: Stereotyping and prejudice against older persons. Cambridge, MA: MIT Press. Neugarten, B. L., ed. 1982. Age or need? Public policies for older people. Beverly Hills, CA: Sage. ———. 1996. Age distinctions and their social functions. In The meanings of age: Selected papers of Bernice L. Neugarten, ed. D. A. Neugarten, 56–71. Chicago: University of Chicago Press. Palmore, E. B. 1972. Compulsory versus flexible retirement: Issues and facts. Gerontologist 12 (4): 343–48. ———. 1999. Ageism: Negative and positive. New York: Springer. Palmore, E. B., and K. Manton. 1973. Ageism compared to racism and sexism. Journal of Gerontology 28 (3): 363–69. Pratt, H. J. 1976. The gray lobby. Chicago: University of Chicago Press. Rix, S. E. 2006. Age discrimination in the United States. Paper presented to the International Federation of Ageing Conference, Copenhagen, May 30–June 2. Shaikh, T. 2007. Woman, 20, sacked for being too young wins bias case. Guardian. November 13. Whiting, E. 2005. The labour market participation of older people. Labour Market Trends 113 (7): 285–95.

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Aging Policy as Family Policy: Expanding Family Leave and Improving Flexible Work Policies STEVEN K. WISENSALE

O

n October 17, 2007, in Manchester, New Hampshire, presidential candidate Hillary Rodham Clinton (D-NY) delivered a speech at a forum hosted by the local YWCA. The senator reiterated what had appeared in a news release issued by her office the previous day in which she proposed that the federal government provide $1 billion annually in grants to encourage states to develop paid family leave programs. ‘‘Too many Americans today feel trapped between being there for their kids and being there for their employer, and our government policies have just not kept up with the realities of American life,’’ she said. ‘‘We can make life a little easier for everyone—for mothers and for fathers—to do the most important job in any society: raising and nurturing the next generation’’ (Office of Senator Hillary Rodham Clinton 2007, 1). Although immediately heralded by many for putting work and family near the top of the political agenda, Clinton also generated some discomfort among experts in aging who see a much different picture of ‘‘the realities of American life.’’ Loaded with references to ‘‘kids’’ and ‘‘mothers and fathers’’ and ‘‘nurturing the next generation,’’ the senator’s comments contained no references to an aging society that depends heavily on family caregivers. Will such an expansion of the Family and Medical Leave Act (FMLA), which originally included elder care, continue to include paid leave for caregivers of aging parents or will it be limited to child care? After all, in 1999 President Bill Clinton also proposed

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paid leave under the FMLA by permitting states to tap surplus funds in their Unemployment Insurance programs, but in doing so he emphasized child care, not elder care. Consequently, he more or less amputated the intergenerational ‘‘family care’’ component of the very act he had signed in 1993. And only a handful of states included elder care in their push for paid leave (Wisensale 2003). So, if even the liberal politicians in our society can address work and family issues without mentioning elder care, what does the future hold for aging policy in general and for family care of the old and frail in particular? The purpose of this chapter is to answer a fourfold set of questions. First, to identify the extent to which caregivers of the elderly must balance work and family responsibilities: Who are they and how do their experiences affect their time, income, and career paths? Second, what are the strengths and weaknesses of the major public policies designed to assist family caregivers? Third, how has the private sector reacted to the challenge of work and family balance, and more specifically, how responsive have corporations been to the expressed needs of employees who care for elderly family members? And fourth, what strategies and recommendations should be put forth to improve family leave and flexible work policies? In light of a new administration assuming the White House in 2009, the timing could not be better for taking a new look at an old problem. CAREGIVERS AT WORK The research literature is saturated with endless references to employees being overworked and underappreciated, often subjected to insensitive managers and supervisors who are blind to their workers’ responsibilities at home. We learn that in comparison to other industrialized societies, Americans now work more than 1,800 hours a year, surpassing Japan, which held the top spot for more than a decade. Yet, the United States has neither implemented nor seriously considered adopting policies that reduce work time (Heymann and Beem 2005). Rather than family-work advocates confronting this problem head-on and lobbying for a mandated workweek of less than forty hours, they have chosen instead to focus their attention on the need for child care, paid leave, and more flex time. What’s more, while workers in the European Union are granted between twenty-five and thirty-three days of paid vacation per year (amounting to a total of five or six weeks off), the United States has no such laws on the books, nor is the issue even on the national agenda for discussion (Gornick, Heron, and Eisenbrey 2007). We also learn that between 1979 and 2004 the employment rate of women, the primary caregivers in American society, increased from 47.5 percent to 56 percent and continues to rise (Gornick, Heron, and Eisenbrey 2007). Further, the U.S. Department of Labor reports that three-fourths of all mothers with children under age 18 are now in the labor force and 65 percent with children under 6 are working full-time (U.S. Bureau of Labor Statistics 2005). And, from

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the perspective of dual-earner families, we learn that 65 percent of families with children are headed by two employed parents, and one out of eight couples works as much as 100 hours per week—all amidst the growing phenomenon of two-parent households working full-time on two different shifts. This is in sharp contrast to the 1960s, when 70 percent of families with children had at least one parent at home full-time (Boots 2004). If not completely overlooked in the research literature, caregivers of the elderly are frequently relegated to secondary status when discussions revolve around policy recommendations for addressing the issue of work and family balance. In turn, the mass media and politicians have followed suit, as illustrated by Senator Clinton’s comments in the opening paragraph of this chapter. But at least two facts in particular cannot be ignored. One is that the population is aging and millions of baby boomers are on the verge of retirement. The other is that, with each passing day, there are more people in the labor force who have elderly relatives in need of assistance of some sort. Indeed, according to a study by the Conference Board, Juggling the Demands of Dependent Care, 37 percent of U.S. workers are more concerned about caring for an elderly relative than a child. Equally significant, beginning in 1999–2000, 60 percent of the labor force was composed of women over 40, the primary caregivers of the elderly, and nearly 40 percent of all American workers fell into the 40-to-54 age group, considered by many to be the prime age range for adult children assisting elderly parents (ProQuest Information and Learning Company 1999). According to a study completed by the Sloan Work and Family Research Network (2002), 35 percent of wage and salaried workers said they had provided care for an elderly relative aged 65 or older in the past year. A more recent study concluded that at least six out of ten employed caregivers reported that they had made some work-related adjustments as a result of their caregiving responsibilities, and 52 percent of women and 34 percent of men indicated that they had experienced workday interruptions as a result of caregiving responsibilities for older relatives (MetLife Mature Market Institute and National Alliance for Caregiving 2007). This much we know: In 2006, somewhere between 30 million and 38 million adult caregivers provided care to adults who had at least one limitation in an activity of daily living (ADL) or an instrumental activity of daily living (IADL) (AARP Public Policy Institute 2006). Although it is generally assumed that most caregivers are women (the average caregiver in America is a 46-year-old woman who works outside the home), a 2004 study found that nearly four in ten caregivers of the elderly are men who work full-time while assisting someone over 50 (National Alliance for Caregiving and AARP 2004). Another fact worth noting is that a quarter of the men and 28 percent of women employees reported they shared a residence with the elderly they were helping (National Alliance for Caregiving and the Center for Productive Aging at Towson University 2003).

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It is further estimated that caregivers of the elderly provide an average of twenty-one hours of care per week, or 1,080 hours per year, and about half also contribute financially, spending between $200 and $324 a month out of pocket to cover groceries, medications, and other related items. All told, the commitment to caregiving alone converts to an economic value of approximately $350 billion annually, a figure that exceeds the total annual expenditures of Medicare ($342 billion in 2006) as well as the total sales of two of the world’s largest corporations: Wal-Mart ($349 billion in 2006) and ExxonMobil ($335 billion) (AARP Public Policy Institute 2006). Viewed another way, it is projected that the annual cost of replacing informal caregiving with paid home care would range between $45 billion and $94 billion, with most of the expense being shouldered by American taxpayers (U.S. Department of Health and Human Services 2002). But the cost of providing informal unpaid caregiving does not end with financial calculations alone. It can also be measured in terms of career disruption for workers and lost productivity for businesses. With respect to workers, due to caregiving obligations, 83 percent report arriving late or leaving early, 41 percent having to take a leave of absence, 37 percent going from full-time to part-time work, 14 percent turning down a promotion, and 12 percent taking early retirement (National Alliance for Caregiving and AARP 2004). Businesses are also affected by caregiving in terms of lost productivity. With almost one-fifth of all workers (19 percent) serving as informal caregivers, productivity losses to U.S. businesses due to caregiving activities have been estimated to exceed $33.6 billion (AARP Public Policy Institute 2006). Viewed from a micro perspective, the cost to employers per full-timeemployed caregiver currently ranges from $2,110 to $2,441 annually, depending on the level of commitment and intensity of the care (MetLife Mature Market Institute and National Alliance for Caregiving 2007). Therefore, not only can employees benefit from expanded leave policies and more flexible work schedules, but so too can employers. Such an approach can quickly become a win-win situation, with employees saving taxpayers billions of dollars through informal caregiving, and employers cutting losses in productivity. Such a convergence, in turn, would contribute to the cultivation of a vibrant and healthy economy. Policies currently in place and the extent to which they should be revamped to enhance this convergence are the focus of the remainder of this chapter. PUBLIC POLICIES GEARED TOWARD ASSISTING CAREGIVERS OF THE ELDERLY Currently, there are several major policies in place at the federal level designed to assist caregivers of the elderly. They fall under four distinct categories: 1. The Older Americans Act and Title XX of the Social Security Act, which includes the Social Services Block Grant program

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2. Tax policy, including the Dependent Care Tax Credit (DCTC) and the Dependent Care Assistance Program (DCAP) 3. The National Family Caregivers Support Program (NFCSP) 4. The Family and Medical Leave Act (FMLA)

A fifth but lesser known policy, the Alternative Work Schedules Act (AWSA), is supportive of family caregivers but is limited to federal employees only. In short, it offers workers flextime that usually consists of some combination of compressed workweeks, variable hours per day, and individually negotiated arrival and departure times at the workplace (Liechty and Anderson 2007). Equally obscure and also confined to federal employees is the Family Friendly Leave Act of 1994, which permits workers to use their sick leave to care for ill family members. The Older Americans Act and Title XX A variety of programs are funded through the Older Americans Act and Title XX of the Social Security Act that support caregivers through information and referral services, respite care programs, and caregiver training and support. Other programs, such as adult day health care, access to assistive devices, transportation, and home-delivered meals, either supplement services already being provided by unpaid family caregivers or substitute for them. Also included is funding for the National Eldercare Locator Service, which, among other things, helps long-distance caregivers access information about available services in other parts of the country, and Aging and Disability Resource Centers, which offer information to caregivers about community and institutionally based long-term care services. More than forty states also have received special funding through the Administration on Aging to design and implement innovative caregiver support programs, including respite care. Tax Policy Many caregivers of the elderly can qualify under two different tax programs. The DCTC offers caregivers a tax credit to offset the costs of providing services to a spouse or dependent who lives with the caregiver but is physically or mentally incapable of self-care. The program is limited to situations in which the one filing for the credit requires such a service in order to remain employed. Expenses for providing the care must total at least $3,000 per year. Dependent care can be provided by either a private individual (e.g., a personal care attendant or a home health aide) or a care center that meets specified regulations, such as an adult cay health center. On average, a household with an income of $50,000 and caregiving expenses that exceed $3,000 will be eligible for a credit of $600 (Scott 2005). Under the DCAP, caregivers who work for employers that offer this benefit may exclude up to $5,000 of their earnings from taxes. A taxpayer in the

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10 percent bracket would save $500 on average, while one in the 25 percent bracket would save about $1,250 (Lyke and Whittaker 2007). Taxpayers can use both the DCTC and the DCAP in the same year, but not for the same expenses. But regardless of the type of tax credit selected, compensation for the caregiver tends to be minimal. The National Family Caregivers Support Program The NFCSP was created in 2000 by the Administration on Aging and implemented in 2001. Funds totaling about $113 million were allocated to states through a congressionally mandated formula based on a proportionate share of a state’s population aged 70 years or older. Under the program, all states are responsible for working closely with area agencies on aging as well as local community service providers to offer five basic services designed to support caregivers: • information about available services in the community • assistance to caregivers in gaining access to supportive services • creation of individual counseling programs, formation of support groups, and offering of caregiving workshops • respite care and other temporary relief for caregivers • various other supplemental services on a limited basis

Under the NFCSP, three types of caregivers are eligible to receive assistance: family caregivers of older adults; grandparents caring for grandchildren; and other family members—such as aunts, uncles, and cousins. Intergenerational in structure, the program gives priority to those in greater social and economic need, such as poor minorities and older individuals who are providing care and support to those with developmental disabilities. Despite its good intentions, a 2004 study completed by the Family Caregiver Alliance in cooperation with the National Conference of State Legislatures found four major weaknesses in the program: inadequate resources at the state level; insufficient funding by the federal government; little consensus among the fifty states on ‘‘best practices’’; and insufficient emphasis on assessing caregivers’ needs (Family Caregiver Alliance and the National Conference on State Legislatures 2004). Nonetheless, the NFCSP represented ‘‘the first federallyfunded program implemented at the state level designed specifically to support the needs of family caregivers of older people,’’ according to Feinberg and Newman (2004, 760). The Family and Medical Leave Act While the programs discussed above may benefit caregivers in a variety of ways through the delivery of social services, tax relief, and counseling

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and training, none of them intersect directly with the growing challenge of balancing work and family responsibilities. The FMLA, on the other hand, was designed for that very purpose. Passed and implemented in 1993, the FMLA was the very first bill signed by newly elected President Bill Clinton. Its adoption marked the end of eight years of congressional debate and two vetoes by Clinton’s predecessor, George H. W. Bush. The law allows a worker to take up to twelve weeks of unpaid leave in any twelve-month period for the adoption of a child; to care for a sick child, spouse, or parent (not in-laws) with a serious health condition; or for the worker’s own health condition. The law further guarantees job security in that an employee is entitled to return to the same or comparable job and requires the employer to maintain health benefits as if the employee never took leave in the first place. The law applies only to companies with fifty or more employees and to workers who have been employed for at least one year or 1,250 hours. Consequently, the FMLA applies to only about 6 percent of the corporations and 60 percent of the labor force (Wisensale 2001). With respect to structure, the FMLA has three major characteristics that place it in sharp contrast to typical models in other industrialized nations. First, the leave is unpaid. All industrialized countries except Australia and the United States provide some form of wage replacement for those taking leave. Second, the U.S. model has a family focus. That is, unlike its European counterparts, which are designed primarily for new parents, the U.S. law is intergenerational in structure, thus allowing time off from work for the birth or care of a child as well as care for an elderly parent. And third, unlike other industrialized countries, the United States links eligibility for leave to company size (fifty or more employees). It should be emphasized here that one of the major explanations for the FMLA’s intergenerational component is the role played by AARP in lobbying on its behalf. In short, AARP agreed to throw its weight behind the bill once it was expanded from child to family care. However, in doing so, any dreams of including paid leave ended abruptly when a majority of legislators concluded that the cost of coverage for elder care would be excessive (Elving 1995; Wisensale 2001). Unfortunately, because the FMLA is often discussed in terms of child care, little attention has been devoted to its potential for addressing major long-term care demands. However, as the boomer generation retires and becomes afflicted with multiple chronic illnesses fifteen to twenty years later, more families will be called upon to address the personal health care needs of their elderly relatives. Between 2000 and 2002, more than half of the states introduced legislation to provide paid leave to family caregivers through the use of state unemployment insurance (UI) trust funds. However, almost all of the state initiatives limited the coverage to ‘‘baby care.’’ That is, in pushing for paid leave, only five of twenty-six states included care of an elderly parent in their proposals. The other states, none of which succeeded, opted to limit their initiatives to baby care (National Partnership for Women

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and Families 2004). In short, the original intergenerational structure of the FMLA was slowly being dismantled by well-intentioned state legislators who were seeking to provide paid leave. This development can be particularly problematic in light of future projections of the long-term care needs of an aging population (Wisensale 2003). However, one success story for paid-leave advocates took place in 2002. California, by expanding its state disability insurance program from maternal to family care, became the first state to adopt a comprehensive paid family and medical leave insurance policy. Workers can receive a partial wage replacement (55–60 percent of wages) with a cap during six weeks of leave per year to care for a newborn or newly adopted or foster child, or to care for a seriously ill family member, including an elderly parent or a domestic partner. Funded solely by employee contributions, the average annual cost per worker is about $27 (Wisensale 2006). It should also be noted that in 2006 the state of Washington became the second state to adopt paid leave. However, when it goes into effect in 2009, it will not include elder care. But families and the government should not be expected to shoulder the entire burden of family care of the elderly. The private sector must also recognize and fulfill its obligations in addressing this issue. After all, in this age of privatization when greater responsibility is being shifted from the public to the private sector and from the collective to the individual—what Hacker (2006) refers to as the ‘‘great risk shift’’—corporations cannot be permitted to take a pass on this. They must be held at least partially accountable for the rising number of stressed-out, dysfunctional families that fuel the world’s highest divorce rate. Therefore, through whatever means are necessary, the business sector needs to be brought into discussions of work and family balance more frequently and become more invested in finding a solution to this problem. Such an approach will not only address the needs of employees but also contribute to greater productivity and higher profits for the company. THE ROLE OF THE PRIVATE SECTOR In October 2007, Working Mother magazine published its twenty-second annual ‘‘100 Best Companies’’ edition, in which it lists, but does not rank, the 100 top family-friendly companies in the United States. Corporations are judged across a variety of categories, including health care coverage, on-site child care, domestic partner benefits, employee assistance programs, and paid parental (not family) leave, among others. There are several categories in particular that pertain directly to caregivers of the elderly and clearly distinguish the Top 100 companies from all the others. For example, all of the Top 100 offer flextime and telecommuting (part-time) to their employees, compared to just 58 and 33 percent, respectively, for those companies not included in the Top 100. Similarly, 97 percent of the Top 100 companies

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offer a compressed workweek and elder care resource and referral services, compared to only 38 and 22 percent, respectively, of other firms. With respect to elder care, obviously it has migrated into the boardrooms of some, if not all, corporations. Aware of the fact that by 2020 one in three households will be responsible for caring for an elderly relative, compared to one in four today, companies are slowly beginning to recognize the needs of their employees (Medical News Today 2006). A 2005 study found that 29 percent of employers provide employees with information about elder care services (Galinsky et al. 2005). Perhaps even more important, the trend appears to be upward rather than downward. That is, in 2005 employers were more likely (34 percent) to report that they offered elder care resource and referral services than employers in 1998 (23 percent) (Galinsky et al. 2005). But whether or not the corporate sector is moving quickly enough to address the concerns of their employees is quite another matter. When prioritized, the most common needs expressed by working caregivers of the elderly are flexibility in work schedules, information and referral services, more support from coworkers and supervisors, and assistance in making decisions about care options (Wagner 2003). Not only do unresolved elder care issues result in lost productivity, but there is also growing evidence that companies with more comprehensive familyfriendly policies consistently outperform the Standard & Poor’s 500 index and report a turnover rate that is half the national average (Healy 2005). Similarly, other studies have shown that companies with employee-friendly cultures and an assortment of job-flexibility policies have a 3.5 percent greater market value than companies that lack such policies (Reed and Clark 2004). In 2001, a survey conducted by Watson Wyatt (2007) concluded that the stock value of employee-friendly companies increased by 64 percent between 1996 and 2001, compared to 21 percent for the least employee-friendly ones. In 1996, a feature article in Business Week entitled ‘‘Balancing Work and Family: Big Returns for Companies Willing to Give Family Strategies a Chance’’ introduced readers to First Tennessee National Bank, a frequent member of Working Mother’s Top 100. Efforts to balance work and family there resulted in an improved employee retention rate that converted to a $106 million profit gain over two years. Aetna Life and Casualty cut its resignations in half by extending its unpaid parental leave to six months, saving the company $1 million a year in hiring and training expenses. Other companies, including DuPont, Eddie Bauer, Marriott, and Motorola offer comparable family-friendly benefits that have produced similar results (Wisensale 2001). More recently, in a two-year study of 1,400 workers, 70 percent of managers and 87 percent of employees reported that workplace flexibility enhanced productivity (Levin-Epstein 2006) Equally significant, managers of six major U.S. firms (Amway, Bristol-Myers Squibb, Honeywell, Kraft, Lucent Technologies, and Motorola) reported that flexible work schedules enhanced retention rates (Burke and Collison 2004).

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Clearly, some businesses ‘‘get it’’ when it comes to addressing work and family issues, and particularly with respect to employees providing care for elderly relatives. However, too few companies have followed suit, and too many are apparently content in maintaining the status quo. The extent to which government should intervene and mandate specific family-friendly policies is open for debate, of course, but in the current political climate, the success of such an approach is highly unlikely. What may be effective in the end is a combination of government jawboning and Top 100–type companies producing a steady drumbeat of effective ‘‘best practices’’ that produce greater worker retention, enhance productivity, and increase profits—all crucial components of a successful corporation in a highly competitive globalized economy. The remainder of this chapter will be devoted to a review of possible strategies that can be employed to address the growing demands of America’s caregivers in general and caregivers of the elderly in particular. Specific policy recommendations will also be discussed. STRATEGIES AND RECOMMENDATIONS FOR EXPANDING LEAVE AND FLEXTIME POLICIES In light of the facts and statistics presented so far, there are numerous options available to both the public and private sectors to expand existing leave and flextime policies. There is also plenty of room for innovation and the introduction of new ideas for meeting the growing demands of employed caregivers of the elderly. Therefore, echoing the work of Gornick and Meyers (2003), Heymann and Beem (2005), Levin-Epstein (2006), and Wisensale (2001, 2006), six specific recommendations for expanding leave and flextime policies in the workplace are put forth here for discussion and consideration: 1. 2. 3. 4. 5. 6.

Providing paid family and medical leave Adopting paid sick leave Mandating annual leave for vacations Identifying and encouraging model workplace flexibility policies Promoting ‘‘soft touch’’ workplace flexibility laws Generating and supporting state initiatives geared to family caregivers of the elderly in particular

Each is discussed below. Provide Paid Family and Medical Leave With the Family and Medical Leave Act about to celebrate its fifteenth anniversary, the time is long past for adopting paid leave. As stated previously, the United States and Australia stand alone as the two remaining industrialized nations that have not adopted paid leave. Other than five states (California, Rhode Island, Hawaii, New Jersey, and New York) that cover paid maternity

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leave through state temporary disability insurance in which a pregnancy is viewed as a disability, and California, which expanded its disability insurance model to include family care, only Washington State has adopted paid leave (as of 2009) without employing a temporary disability insurance funding mechanism. With respect to funding a wage replacement under the FMLA, Congress has several options. It can, for example, revisit the use of surplus UI trust funds, a policy that Canada has employed for more than a decade with few if any negative ramifications as a result. A second possibility would be to tax employees and employers directly to create a federal trust fund that can be tapped to cover caregiving responsibilities. In California, only employees pay such a tax, which averages around $30 a year. Or, Congress can consider Senator Clinton’s proposal (originally introduced by Senator Chris Dodd [D-CT] as the Family and Medical Leave Expansion Act) that would jump-start state legislative activity by offering federal funds for a series of model demonstration projects, including paid leave. This may, of course, result in a patchwork of paid leave policies scattered across the country, but it may also serve as a laboratory for exploring the strengths and weaknesses of various players and funding mechanisms. Since its inception, there have been only two major attempts to reform the FMLA. The first came in 1999 when President Clinton recommended through an executive order that states employ their UI trust funds to cover paid leave—a policy proposal that was never adopted by any state and was quickly rescinded when George W. Bush assumed the White House in 2001. The second major attempt occurred in 2006 when the Military Families Leave Act (MFLA) was passed by Congress but was lost in a presidential veto that killed the expansion of the State Children’s Health Insurance Program (SCHIP). If adopted, the MFLA will provide military families up to six months of leave to care for their combat-injured loved ones. Note, however, that paid leave was not included in the original MFLA bill, and it will only apply to a relatively small and younger cohort. But beyond providing a wage replacement, the FMLA can and should be expanded in at least five other ways. First, make it more accessible to workers so that those in firms with as few as twenty-five employees, or even fifteen, can take leave to care for a child, spouse, or elderly relative. Second, broaden the definition of a caregiver to include in-laws (such as daughtersand sons-in-law) and thus replace the current constricting policy definition of parent. Third, allow grandchildren to provide care to grandparents, which is not covered by the FMLA as it exists today. We should always foster more intergenerational relationships and responsibilities when given the opportunity. Fourth, expand the length of leave from twelve weeks to eighteen or twenty-four weeks and include a provision that recognizes the need for providing intermittent care coverage among caregivers of the elderly. And finally, expand the law further to cover same-sex partners who have the

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same caregiving responsibilities, including spousal and elder care, as traditional families. Whatever options are selected and strategies employed, it is imperative that advocates for the aged remind themselves that elder care must be included in any reform efforts. If there are any agnostics or nonbelievers in the crowd, they should consult my earlier article ‘‘Two Steps Forward, One Step Back: Family Leave as Retrenchment Policy’’ (Wisensale 2003) for a reminder of how quickly elder care was jettisoned from the original FMLA when states pushed toward paid leave in 2000–2001. Simply put, coverage of elder care cannot be viewed as a sand castle that is left to the mercy of a rapidly shifting political surf. Adopt Paid Sick Leave The federal government should establish a national standard for paid sick days, a benefit that is quite common in other industrialized countries. However, currently there are no state or federal laws that require employers to provide paid sick days. Consequently, when illness strikes, 57 million Americans, or about 50 percent of the nation’s labor force, do not have a single paid sick day available. Only one in three has paid sick days for doctors’ appointments and the situation worsens as one looks at lower income brackets. Within the lowest quartile of wage earners, nearly 80 percent have no paid sick leave. This is despite the fact that an overwhelming majority of Americans believe employees deserve time off from work to address their own or their families’ health care needs (National Partnership for Women and Families 2007). But only recently has Congress moved to address this issue. In April 2005, Senator Ted Kennedy (D-MA) and Representative Rosa DeLauro (D-CT) introduced the Healthy Families Act (HFA), which would require employers with fifteen or more employees to provide seven paid sick days to care for their own and their families’ medical needs. Passage of the Act, which has failed three times so far despite Democrats having taken control of Congress in 2006, would instantly benefit 66 million Americans, many of whom are caregivers of the elderly. By the federal government adopting such legislation, all states and businesses would automatically be forced to operate within the same set of rules. However, under no circumstances should the HFA become a substitute for an expanded FMLA or serve as an inoculation against future attempts to adopt paid family leave. Further, in passing the HFA, it is essential that paid sick leave include time off for the care of elderly relatives. Mandate Annual Leave for Vacations Unlike employees in most other industrialized countries, workers in the United States get very little paid vacation time. According to Heymann and

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Beem (2005), at least ninety-six nations have adopted some degree of statutory annual leave, and eighteen mandate a minimum of at least twenty paid vacation days a year. Workers in Finland and France, for example, are guaranteed thirty paid vacation days by law; in Sweden, they get twenty-five days and in Germany twenty-four. All European countries must give their workers at least twenty paid vacation days plus national holidays (Allegretto 2005; Levin-Epstein 2006). Such policies are in sharp contrast to the United States, where most workers have to be employed for twenty-five years before they qualify for twenty paid vacation days. The United States does have ten national holidays, but they are not mandatory and more employees work on those days with each passing year. In recommending the passage of a federal law that establishes a minimum standard for paid vacation leave, I urge advocates and policy makers to avoid the temptation to view paid family leave and vacation time as interchangeable benefits. If anything, paid vacation time for caregivers should be viewed as respite care, not an extension of the FMLA or HFA. Until all three of these initiatives are adopted individually and stand alone as separate options for family caregivers, they should not be combined to address caregiving demands. Otherwise, the three policies will blur into one, devoted advocates for each will disband, efforts to expand the programs will be hindered, and ultimately support for family caregivers will atrophy. Therefore, the mission is clear: view leave policy as a three-pronged strategy: family leave, sick leave, and mandated vacation time. Identify and Encourage Model Workplace Flexibility Policies Either the government or a very effective private nonprofit organization should recognize innovative flexibility policies in the workplace and serve as a clearinghouse where other corporations can explore various models of flexwork and exchange ideas. Flextime programs geared specifically to caregivers of the elderly should be highlighted and best practices identified. Examples of such flex-work policies include creative part-time work arrangements, job sharing, a compressed workweek, flexibility in starting and ending the workday, and greater use of telecommuting. But if companies are not already motivated by their employees’ caregiving responsibilities, concerns over a world flu pandemic has forced some corporations to devise innovative work schedules and telecommuting strategies that can be employed to keep the business afloat. Corporate executives may not only be enlightened about the value of flex-work by such exercises but may also consider adopting such policies when public health concerns are not a top priority. The government can play several roles in transforming the culture of the workplace, including offering tax incentives to corporations who establish themselves as family-friendly by adopting generous leave policies, providing resource and referral programs, and offering flexible work schedules so

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employees can address family needs. By assuming a government-as-shepherd role, the public sector can do much to influence the behavior of the private sector without alienating it. For example, in Japan the Ministry of Health, Labor, and Welfare launched a special website where employers can post examples of their success stories in helping their employees balance work and family obligations. Australia and New Zealand have established similar websites (Levin-Epstein 2006). There are a few government websites in the United States geared to work and family issues, including the Department of Labor’s Flex Options for Women Project, but more informative sites are needed. Meanwhile, the federal government can not only follow in Japan’s footsteps and create a similar website but also remind corporations that it has been in the vanguard of the workplace flexibility movement by permitting each executive agency to establish its own approaches to flex-work (Levin-Epstein 2005). For example, all full-time workers in federal agencies are guaranteed thirteen paid sick days each year, and telecommuting is becoming more common for those employees who are not in direct contact with the public daily. Promote ‘‘Soft Touch’’ Workplace Flexibility Laws An emerging strategy that may prove effective in convincing corporations to create and maintain a flexible workplace is the adoption of soft-touch laws. Developed first in Great Britain, the soft-touch law promotes employee and employer dialogue by legally empowering employees with the right to request a flexible work schedule in order to address family caregiving needs. In submitting the formal document, the employee is required to respond to a list of questions that asks how can the employer accommodate the employee without harming the business. The employer is then required to discuss the matter with the employee and either approve or disapprove the request in writing (Levin-Epstein 2006). Currently, the British model applies only to parents of children under age 6 and disabled children under age 18. However, the United States could adopt a similar law and extend it to include caregivers of the elderly. Generate and Support State Initiatives Geared to Family Caregivers Although it is implied here that most of the proposed strategies should emerge from the federal government, this does not have to be the case. Through careful funding of very selective demonstration projects, the federal government can encourage states to adopt paid-leave laws, flex-work policies, soft-touch policies, and other family-friendly initiatives that cut across the life span. And clearly, the states have been very active with respect to work and family legislation. Between January 2005 and May 2006, the Sloan Work and Family Research Network identified a total of 234 bills and 530 statutes related to work and

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family issues. Twenty-seven states introduced three or more work-family bills, nineteen states were classified as having a particularly high number of workand/or family-related committees, and sixteen had both a high number of bills and a high number of such committees (Sloan Work and Family Research Network 2006). Legislatures in both New York and New Jersey have introduced paid family leave bills, for example, and almost twenty states have established respite care programs geared specifically to caregivers of the elderly. In Massachusetts, all employers must provide a minimum of seven paid sick days per year, which employees can use to care for an elderly relative. Rhode Island and Pennsylvania guarantee employees up to fourteen and twenty-four hours of unpaid leave, respectively, during any twelve-month period to care for an elderly relative. Compared to where we were twenty years ago, this represents significant progress (Wisensale and Allison 1988). Either through a traditional carrot-and-stick approach initiated by the federal government or various other means, states should be encouraged to adopt more family-friendly legislation aimed at supporting caregivers of the elderly. Perhaps the time has come for applying an abbreviated version of a ‘‘family impact statement’’ to legislative proposals that concern work and family. That is, prior to passing any law on this issue in the future, state and federal lawmakers should be required to pause and respond to at least one very important question in particular: Will this legislation benefit caregivers of the elderly? This question is also appropriately attired for corporate boardrooms. CONCLUSION At this point, it is customary to summarize much of what has been written in the preceding pages and conclude the chapter with a series of recommendations. Yes, services under the Older Americans Act and Title XX should be broadened and their funding increased. Yes, tax credit programs should be expanded so more people can participate. Of course the Family and Medical Leave Act should include a respectable wage replacement and be made more accessible to more workers. And yes, the Healthy Families Act should be passed, the budget for the National Family Caregivers Support Program should be doubled, and more states and corporations should adopt a variety of family-friendly policies, including soft-touch laws. I wholeheartedly support all of these endeavors. Calculations can be made and costs for taking such action can be projected with a fairly high degree of accuracy. However, a very disturbing pair of questions lurk in the shadows: What is the cost of inaction, and who will pay the price? REFERENCES AARP Public Policy Institute. 2006. Valuing the invaluable: A new look at the economic value of family caregiving. Issue Brief No. 82. Washington, DC: AARP. Allegretto, Sylvia. 2005. U.S. workers enjoy far fewer vacation days than Europeans. Washington, DC: Economic Policy Institute.

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Boots, Shelly W. 2004. The way we work: How children and their families fare in a 21st century workplace, Washington, DC: New America Foundation. Available at http://www.newamerica.net/publications/policy/the_way_we_work. Burke, Mary Elizabeth, and Jessica Collison. 2004. U.S. job recovery and retention poll findings. Arlington, VA: Society for Human Resources Management. Business Week. 1996 (Sept. 16). Balancing work and family: Big returns for companies willing to give family strategies a chance. Available at http://www.businessweek. com/1996/38/b34931.htm. Elving, Ron. 1995. Conflict and compromise: How Congress makes the law. New York: Simon & Schuster. Family Caregiver Alliance and the National Conference of State Legislatures. 2004. The state of the states in family caregiver support: A fifty-state study. San Francisco: Family Caregiver Alliance. Feinberg, Lynn, and Sandra Newman. 2004. A study of 10 states since passage of the national family caregiver support program: Policies, perceptions, and program development. Gerontologist 44 (3): 760–69. Galinsky, Ellen, James Bond, Stacey Kim, and Erin Brownfield. 2005. Overwork in America: When the way we work becomes too much. New York: Families and Work Institute. Gornick, Janet, Alexandra Heron, and Ross Eisenbrey. 2007. The work-family balance: An analysis of European, Japanese, and U.S. work-time policies. Washington, DC: Economic Policy Institute. Gornick, Janet, and Marcia Meyers. 2003. Families that work: Policies for reconciling parenthood and employment. New York: Russell Sage Foundation. Hacker, Jacob S. 2006. The great risk shift: The assault on American jobs, families, health care, and retirement and how you can fight back. Oxford: Oxford University Press. Healy, Cathy. 2005. A business perspective on workplace flexibility: When work works—an employer strategy for the 21st century. New York: Families and Work Institute. Heymann, Jody, and Christopher Beem, eds. 2005. Unfinished work: Building equality and democracy in an era of working families. New York: New Press. Levin-Epstein, Jodie. 2005. How to exercise flexible work: Take steps with a soft touch law. Work-Life Balance Series Brief No. 3. Washington, DC: Center for Law and Social Policy. Available at http://www.clasp.org/publications/work_life_brf3.pdf. ———. 2006. Getting punched: The job and family clock. Washington, DC: Center for Law and Social Policy. Liechty, Janet, and Elaine Anderson. 2007. Flexible workplace practices: Lessons from the federal Alternative Work Schedules Act. Family Relations 56 (3): 314–17. Lyke, Robert, and Julie Whittaker. 2007. Tax benefits for health insurance and expenses: Overview of current law and legislation, 2007. CRS Report RL33505. Washington, DC: Congressional Research Service. Medical News Today. 2006. Companies increasingly offering workplace benefits for employees who provide elder care. http://www.medicalnewstoday.com/articles/48255.php. MetLife Mature Market Institute and National Alliance for Caregiving. 2007. The MetLife Caregiving Cost Study: Productivity losses to U.S. business. Westport, CT: MetLife Mature Market Institute. National Alliance for Caregiving and the Center for Productive Aging at Towson University. 2003. The MetLife study of sons at work: Balancing employment and eldercare. Westport, CT: MetLife Mature Market Institute.

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National Partnership for Women and Families. 2004. Get well soon: Americans can’t afford to get sick. Washington, DC: National Partnership for Women and Families. ———. 2007. Everyone gets sick; not everyone has time to get better. http://www. nationalpartnership.org/site/PageServer?pagename=psd_index. Office of Senator Hillary Rodham Clinton. 2007. Hillary Clinton’s agenda for working families: Helping parents balance work and family. Press release, October 16. Available at http://www.hillaryclinton.com/news/release/view/?id=3743. ProQuest Information and Learning Company. 1999. Elder-care: A growing workplace issue. Growth Strategies, November 15. Available at http://findarticles.com/ p/articles/mi_qa3908/is_199911/ai_n8861049. Reed, Patricia, and Shirley Clark. 2004. Win-win workplace practices: Improved organizational results and improved quality of life. Washington, DC: Women’s Bureau, U.S. Department of Labor. Scott, Christine. 2005. Dependent care: Current tax benefits and legislative issues. CRS Report RS21466. Washington, DC: Congressional Research Service. Sloan Work and Family Research Network. 2002. Questions and answers about elder care. http://wfnetwork.bc.edu/pdfs/elder_care_91707.pdf. ———. 2006. The 2005–2006 legislative summary sheet of elder care bills introduced into state legislatures. http://wfnetwork.bc.edu/pdfs/flexschedbills.pdf. U.S. Bureau of Labor Statistics. 2005. Women in the labor force. http://www.bls.gov/ cps/wlf-databook2005.htm. U.S. Department of Health and Human Services. 2002. Informal caregiving: Compassion in action. http://aspe.hhs.gov/search/daltcp/reports/Carebro2.pdf. Wagner, Donna. 2003. Workplace programs for family caregivers: Good business and good practice. San Francisco: Family Caregiver Alliance. Watson Wyatt. 2007. The business case for superior people management. http://www. watsonwyatt.com/strategyatwork/article.asp?articleid=9521. Wisensale, Steven K. 2001. Family leave policy: The political economy of work and family in America. Armonk, NY: M. E. Sharpe. ———. 2003. Two steps forward, one step back: The family and medical leave act as retrenchment policy. Review of Policy Research 20 (2): 135–51. ———. 2006. California’s paid leave law: A model for other states? Marriage and Family Review 39 (2): 177–95. Wisensale, Steven K., and Michael Allison. 1988. An analysis of the 1987 state family leave legislation: Implications for caregivers of the elderly. Gerontologist 28 (3): 779–84.

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About the Editor and Contributors

THE EDITOR Robert B. Hudson, Ph.D., editor of this two-volume set, is professor and chair of the Department of Social Policy, Boston University School of Social Work. He has written widely on the policies and politics of aging, his work having appeared in Social Service Review, Milbank Quarterly, International Social Security Review, Journal of Health Politics, Policy and Law, and Handbook of Aging and the Social Sciences, among other publications. He currently serves as editor-in-chief of Public Policy and Aging Report, the quarterly publication of the National Academy on an Aging Society. Dr. Hudson is a fellow of the Gerontological Society of America (GSA) and an elected member of the National Academy of Social Insurance (NASI), where he chairs the John A. Heinz Dissertation Award Committee. He has received the Donald Kent Award from GSA and the Arthur S. Flemming Award from the National Association of State Units on Aging. His most recent book is The New Politics of Old Age Policy (Johns Hopkins University Press). He received his doctorate in political science from the University of North Carolina at Chapel Hill. CONTRIBUTORS W. Andrew Achenbaum, Ph.D., is professor of history and social work at the University of Houston’s Graduate College of Social Work. Author of five books and coeditor of eleven others, he is currently working with H. R. Moody on a book tentatively entitled Leaving a Legacy, which will address baby boomers’ responsibilities to pass on to rising cohorts a sounder socialinsurance system and global environment.

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Robert H. Binstock, Ph.D., is professor of aging, health, and society at Case Western Reserve University. A former president of the GSA, he has served as director of the White House Task Force on Older Americans and as chairman and member of a number of advisory panels to the federal, state, and local governments and foundations. He is also a former chair of the Gerontological Health Section of the American Public Health Association. He has frequently testified before the U.S. Congress. Professor Binstock has published some three hundred articles, book chapters, monographs, and books, most dealing with politics and policies affecting aging. The latest of his twentyfive books is Aging Nation: The Economics and Politics of Growing Older in America (2006), coauthored with James H. Schulz. Christine Bishop, Ph.D., is Atran Professor Labor Economics at the Heller School of Social Policy and Management, Brandeis University, where she also directs the doctoral program. She is an economist whose research spans policy-related problems in health services supply, demand, and financing, focusing on services for older adults. Her current studies concern the reorganization of work in nursing homes to provide more person-centered care and the impact of Medicare’s prescription drug benefit on elders eligible for both Medicare and Medicaid. She earned her doctorate in economics from Harvard University. Jeffrey Burr, Ph.D., received his doctorate in sociology from the University of Texas at Austin. He is currently associate dean of the McCormack Graduate School of Policy Studies and professor of gerontology at the University of Massachusetts–Boston. He is a fellow in the UMass Boston Gerontology Institute, a fellow of the GSA (Behavioral and Social Sciences Section), and a member of Sigma Phi Omega (the national gerontological honor society). Dr. Burr’s research interests include the social demography of aging, household composition and living arrangements, race and ethnicity in aging populations, labor force participation in later life, and productive activity in later life. Craig Copeland, Ph.D., is a senior research associate with the Employee Benefit Research Institute (EBRI). He has been with EBRI since 1997, where he is the director of the EBRI’s Social Security Reform Evaluation Research Program. In addition to Social Security, his research has focused on employment-based retirement plans and individual retirement accounts. Dr. Copeland has authored more than fifty EBRI Issue Briefs and EBRI Notes articles. In addition, he also has authored chapters in books and articles in journals, most recently, ‘‘Increasing Debt Risk of Those Age 55 or Older, 1992–2004’’ in Public Policy and Aging Report. He received a B.S. in economics from Purdue University and a Ph.D. in economics from the University of Illinois at Urbana–Champaign.

About the Editor and Contributors

273

John Gist, Ph.D., is senior advisor for fiscal and economic affairs in AARP’s Public Policy Institute (PPI). Prior to his tenure at AARP, he was a professor of political science and public affairs from 1973 until 1987 at the University of Illinois–Springfield, the University of Georgia, and Virginia Tech. He was a visiting scholar at the U.S. Department of Housing and Urban Development in 1977–1979 and 1985–1986. He holds a Ph.D. in political science from Washington University in St. Louis. Dr. Gist has published numerous articles on federal budget, entitlement spending, and tax policy issues in the Milbank Quarterly, Gerontologist, Journal of Aging and Social Policy, Journal of Urban Economics, American Political Science Review, Midwest Journal of Political Science, Journal of Politics, and Policy Studies Journal. His recent PPI studies include publications on boomers’ inheritances and savings adequacy, personal debt among people aged 50 and older, the distributional effects of tax policies, entitlement spending and the economy, and income growth and inequality. His current work concerns baby boomers’ housing wealth, refinancing, and consumption of housing equity. Karen C. Holden, Ph.D., is professor of public affairs and consumer science at the University of Wisconsin–Madison. She is a fellow of the GSA, a member of NASI, and an associate of the Fellows Program of EBRI. Dr. Holden’s broad area of research is the effect of social security and pension policy on economic status after retirement and widowhood. Her most recent research is on retirement savings adequacy and, using the Wisconsin Longitudinal Study, the relationship between economic and psychological well-being (or ‘‘happiness’’) among older women and men. She has also published in the area of disability, welfare reform, mandatory retirement policies, and risk of nursing home care. She received her B.A. from Barnard College and her doctorate in economics from the University of Pennsylvania. Edward F. Lawlor, Ph.D., is the dean and William E. Gordon Professor at the George Warren Brown School of Social Work at Washington University in St. Louis. Dean Lawlor conducts research and writes on access to health care, health care reform, policy analysis, and aging. A national Medicare expert, he is the author of Redesigning the Medicare Contract: Politics, Markets, and Agency. He is founding editor of the Public Policy and Aging Report. Prior to joining the Brown School, he served as dean at the School of Social Service Administration at the University of Chicago from 1998 to 2004. From 1990 to 1998, he was the director of both the Center for Health Administration Studies and the Graduate Program in Health Administration and Policy at the University of Chicago. For ten years, Dr. Lawlor was a member and secretary of the Chicago Board of Health, and he has served on numerous policy and advisory bodies in the fields of health care and aging.

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About the Editor and Contributors

John Macnicol, M.A., Ph.D. (Edin.), is visiting professor in social policy at the London School of Economics. He has published extensively on current social policy and the history of social policy. His recent publications include The Politics of Retirement in Britain, 1878–1948 (Cambridge University Press, 1998); Paying for the Old: Old Age and Social Welfare Provision (editor; Thoemmes Press, 7 vols., 2000); and Age Discrimination, an Historical and Contemporary Analysis (Cambridge University Press, 2006; winner of the UK Social Policy Association’s award for Best New Publication, 2006–2007). He is currently working on the rise of the U.S. neoconservatives and their influence on social policy in the United Kingdom. Jan E. Mutchler, Ph.D., received her doctorate in sociology from the University of Texas at Austin. She is currently professor of gerontology and associate director for social and demographic research at the Gerontology Institute, University of Massachusetts–Boston. She is a fellow of the GSA (Behavioral and Social Sciences Section). Dr. Mutchler’s current research focuses on intergenerational family relationships, racial and ethnic diversity, household and family demography, and health disparities in later life. Greg O’Neill, Ph.D., is director of the National Academy on an Aging Society, the public policy institute of the GSA. The academy conducts research on issues related to population aging and publishes the quarterly Public Policy and Aging Report. He directs GSA’s Civic Engagement in an Older America project (www.civicengagement.org), an initiative funded by the Atlantic Philanthropies to promote the study of civic engagement by experts in the field of aging. Dr. O’Neill’s publications include The State of Aging and Health in America, a national and state-by-state report card on healthy aging. He received his Ph.D. in sociology with a concentration in population studies from Duke University in 1998. Michelle Putnam, Ph.D., is assistant professor at Simmons College School of Social Work in Boston. She is a nationally recognized expert in the area of aging and disability policy and the population of people aging with longterm disability. Dr. Putnam has published numerous articles and book chapters on the intersections of aging and disability, socioeconomic and policy issues related to independent living and long-term care, and collaboration and coalition-building across aging and disability organizations and service networks. She is a frequent reviewer for the National Institute of Disability and Rehabilitation Research. Dr. Putnam has led multiple research and knowledge translation studies funded by organizations such as AARP, the John A. Hartford Foundation, and the National Institute on Aging. She is a frequent keynote speaker on the topic of aging with disability around the United States and abroad.

About the Editor and Contributors

275

Sara E. Rix, Ph.D., is a strategic policy advisor with the Economics Team of the AARP PPI, where she focuses on the economics of aging, labor force and demographic trends, employment and retirement policy, and older worker employment issues. She has written and spoken extensively on aging issues for more than thirty years. Dr. Rix has been involved in numerous national and international activities that focus on an aging world, including serving as a lecturer in the Economics and Financial Aspects of Aging training program of the UN’s International Institute on Ageing in Malta. She is a fellow of NASI, the GSA, and the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA). In her spare time, she volunteers as a primate interpreter at the National Zoo. Jack L. VanDerhei, Ph.D., is a faculty member at Temple University’s Fox School of Business and Management (Department of Risk, Insurance, and Healthcare Management). He has authored more than one hundred publications devoted to employee benefits and insurance; his major areas of research focus on the financial aspects of private defined benefit and defined contribution retirement plans. In his capacity as the research director of EBRI’s Fellows Program, he is currently analyzing a database with annual observations since 1996 of over 20 million 401(k) participants from more than 50,000 plans. He has won the American Risk and Insurance Association award for the best feature article in the Journal of Risk and Insurance and the James S. Kemper Foundation Award for the best feature article in Risk Management and Insurance Review. VanDerhei serves as editor of Benefits Quarterly, is a member of NASI, and serves on the Advisory Board of the Pension Research Council at the Wharton School of the University of Pennsylvania. Diane M. Watts-Roy received her M.A. degree in sociology from the College of William and Mary in Williamsburg, Virginia. Her previous work includes serving as the director of an Alzheimer’s respite program. She is currently a doctoral student in the Department of Sociology at Boston College. Her dissertation research explores the consumer perspective on regimens associated with extending the life span and/or delaying aging. John B. Williamson, Ph.D., received his B.S. degree from MIT and his doctorate in social psychology from Harvard University, and he is currently a professor of sociology at Boston College. He has published sixteen books and more than 120 journal articles and book chapters. Among his books are The Generational Equity Debate; The Senior Rights Movement; Age, Class Politics and the Welfare State; Old Age Security in Comparative Perspective; and The Politics of Aging. He is currently chair of the Social Research, Policy, and Practice section (and a vice president) of the GSA. He is affiliated with the Center for Retirement Research and with the Center for Work and Aging,

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both at Boston College. The focus of his current research is on the comparative international study of social security systems. Steven K. Wisensale, Ph.D., is professor of public policy in the Department of Human Development and Family Studies at the University of Connecticut. His primary teaching responsibilities and research interests are in family policy and aging policy, and he is the recipient of the University of Connecticut’s Excellence in Teaching Award. He is the author of more than seventy-five journal articles, book chapters, and policy briefs. Dr. Wisensale has published three books, including Family Leave Policy: The Political Economy of Work and Family in America. He has received two Fulbright Fellowships—one in Germany, the other in the Czech Republic—and is a former research fellow of the GSA. In 1999, he was a consultant to the United Nations on world population aging. Dr. Wisensale serves on the Board of Directors of the Council on Contemporary Families and is a member of the Public Policy Committee of the GSA.

Index

AARP, membership efforts, 148, 242 age discrimination, 244–46; in the workplace, 246–48; in the UK, 248–51 age, various types of, 242–43 age wave, 6, 16, 96, 102, 163 aging and old age, importance of, 243–44 aging policy recommendations, 267 aging population, 4; impact on health expenditures, 96–102; impact on long-term budget issues, 191–92; and ublic policy, 130–32; two waves, growing diversity, 67; as voting bloc, 137 Alternative Work Schedules Act, 257 appeal of older workers, 86–87 Avastin, 100–101 averting increased national debt, 191–92 baby boomers: effect on stock market, 3, 11–13; age wave, 6, 16, 96, 102, 163; and cultural movements, 25, 41, 56; defined, vii, 23, 118; health care economics, 105–6; impact on health expenditures, 96–102; as market segment, 99–101; political identity, 113; stereotype, 41, 50; as threatening political force, 136. See also diversity of boomers; older Americans

baby boomers, compared with prior generation, 69, 121–23 ‘‘boomer stereotype,’’ 41 Butler, Robert, 48 campaign contributions, 141 caregivers, 254–56; public policy for, 256–60. See also family leave chronic disease, 37–38. See also health care costs chronological age, 242 civic participation, 16–18, 131, 236; as key voting bloc, 137. See also politics and older Americans; volunteerism Civic Ventures, 14, 17, 50, 57 Clinton administration, 117, 177, 253; and FMLA, 259, 263 Clinton, Hillary Rodham, 253, 263 community service. See politics and older Americans; volunteerism cultural movements, involvement, 25, 41, 56 defined benefit vs. defined contribution, 198, 211 demographics, changing, 4–6. See also aging population ‘‘demography is not destiny,’’ 17–18, 71 dependant care, tax policy, 257–58

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Index

Depression and social policy, 120, 124 differential treatment by age, 241–51 discrimination and ageism, 244–51; in the workplace, 246–48 diversity of boomers: current and projected, 26–28; education, 30–32; historical context, 24–26; inequalities, impact in later life, 28–30; and politics, 146–48; two waves, growing diversity, 67; wealth and pensions, 35–36 diversity and heterogeneity, discussion, 40–42 ‘‘doom and gloom’’ arguments, 3 earnings, 33–35. See also economics; pensions Easterlin hypothesis, 64 economics: boomers’ effect on health care costs, 95–102; boomers’ prospects, 63–64, 71–72; entitlement spending, 173–80; factors to working during retirement, 81–85; federal spending, program costs, 128; market uncertainty, 83–84 economists’ positive scenarios, 13, 184–88 education, 30–32: degrees earned among cohort, 31; as positive factors to longer work years, 85–86 education expenditures, stabilized, 64 employers, willing to retain and hire, 87–89 employment discrimination, 245 employment rate of mothers, 254 entitlements, 173–74; factors in entitlement spending, 176–80 experience, early boomers vs. late boomers, 65–69 family leave, 253, 262; adult caregivers, 254–56; methods to expand, 262–67; private sector role, 260–262 Family and Medical Leave Act (FMLA), 258–60, 262 flex jobs, 88, 260–62, 265; methods to increase, 262–67

frequently asked questions about baby boomers, 9–11 generational equity debate, defined, 154, 155; discussion of, 153–59; conclusion, 163–66 generational interdependence, 159–61 gerontocracy, 135 ‘‘gray lobby,’’ 241. See also politics and older Americans guaranteed income, birth of, 121 health advances, future of, 98–101 health behaviors: diversity by race, gender, ethnicity, 38–40; health disparities in later life, 41 health care costs, 9–11; boomers’ effect on, 95–96; as factor to work, 84; Medicare part D, 101, 104–5, 117, 126, 215–16, 228; rising costs, impact on boomers, 102–5; technological advances, 96–97 health care economics, discussion, 105–6 health care as investment, 229–33, 236–38; current shift toward, 233–36 health care national plans, 227–29, 237 health expenditures, boomers’ impact, 96–102 history: boomers’ early years, 64–65; health care policy events, 237 historic roots of older Americans: advocates of change, 56–57; involvement in cultural movements, 25, 41, 56; as political activists, 56, 124 homeownership, 32–33 housing, 103, 202, 221 ‘‘infinite horizon,’’ 7 insurance. See health care costs; Medicare intergenerational conflict, 148–49 investment in health care, 229–233, 236–238; labor force changes, 13–16, 78, 243 labor participation, future projections, 81, 90

Index

labor shortage, 87 late-life employment, discussion, 90–91 Leadership Council of Aging Organization (LCAO), 124; member groups, 125–26 leading edge, 65 life expectancy, 4–5; diversity by race, gender, ethnicity, 36 lifespans and health care spending, 97–98 Medicare, 95, 101–2, 120–21, 215–24; 1993 change, 9; challenges, 218–23; increasing literature, 215; recipients, 3, 42, 84, 217; rethinking current approach to, 215–24; spending, 10–11 Medicare Modernization and Prescription Drug Act (MMA), 215, 220 Medicare part D, 101, 104–5, 117, 126, 215–16, 228 MINT model, 67–68 National Family Caregivers Support Program (NFCSP), 258 national savings, 190–91

279

physiological age, 242 political participation, 141–43 politics and older Americans: historical appeal of old age in policymaking, 118–19; as influential bloc, 121–27, 135, 141–43; involvement with organizations, 56, 143–44, 241 positive factors to longer work years, 85–86 poverty, 67–70 private pensions. See pensions private sector, role in work-family issues, 260–62 productive aging, 47–49; throughout history, 51–55; six categories of, 57–58 psychological age, 243 public policy: and aging boomers, conclusion, 130–32; for caregivers, 256–60; and Depression, 120; development, 114–18; entitlement spending, 173–80; growth of programs, 118–30; health care policy, historical events, 237; recommendations, 267; solutions to entitlement, 188–91; political identity, 113; voting bloc, 137

Old Age and Survivors Insurance (OASI), 66–67 older Americans, historic roots: advocates of change, 56–57; involvement in cultural movements, 25, 41, 56; as political activists, 56, 124 Older Americans Act (OAA), 115, 125–29, 228, 236, 257

replacement rate, 200–201, 210 retirement: changing views of, 121; factors, 81–85; planning, 69–70; and well-being, 69 retirement, working during, 77–78, 200; financial factors, 81–84; health factors, 84–85; less physically demanding jobs, 86 retirement, employers’ view, willing to retain and hire, 87–89

paid leave, 264–65 pensions, 35–36, 64, 65, 82–83, 202–8; 401(k), 208–211; adequate funds, 202–4; defined benefit vs. defined contribution, 198, 211; conclusions, 211–12; freeze, 204–6; participation, 198–200; replacement rate, 200–201, 210. See also public policy; retirement personal savings, 190–91 phased retirement, 88–89

sick leave, paid, lack of, 264 social age, 242 Social Security Act, Title XX, 257 Social Security, annual trustees’ report, 6–8; and boomers, 6–9, 78–81, 82; changes, 153–55, 161–62; historical change in labor force, 78–81; making solvent, 189; privatization, 162–63; trends at retirement years, 66–67 socioeconomic diversity, current, 30–36

280

‘‘take charge’’ generation, 118 theory of productive aging, 57–58 timeline, health care policy events, 237 ‘‘Top 100’’ companies, 260–62 trailing edge, 66 treatment by age, conclusion, 251 trust fund ratio at life expectancy, 66–67 two waves, growing diversity, 67

Index

unhealthy behaviors, 38–40 United Kingdom, and ageism, 248–51 vacation leave, paid, 264–65 volunteerism, 16–17, 230, 236; as productive aging, 55–57 voting, 137–41, 144–45 wealth. See pensions Working Mother, 261 workplace ageism, 246–48

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Boomer Bust?

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Boomer Bust? Economic and Political Issues of the Graying Society

THE BOOMERS AND THEIR FUTURE VOLUME 2

Edited by

Robert B. Hudson

Praeger Perspectives ,

Library of Congress Cataloging-in-Publication Data Boomer bust? : economic and political issues of the graying society / edited by Robert B. Hudson. p. cm. Includes bibliographical references and index. ISBN 978-0-275-99549-2 (set : alk. paper) — ISBN 978-0-275-99551-5 (vol. 1 : alk. paper) — ISBN 978-0-275-99553-9 (vol. 2 : alk. paper) 1. Population aging—United States. 2. Baby boom generation— Retirement—United States. 3. United States—Population—Economic aspects. I. Hudson, Robert B., 1944– HQ1064.U5B66 2009 2008024968 306.30 808440973—dc22 British Library Cataloguing in Publication Data is available. Copyright © 2009 by Robert B. Hudson All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2008024968 ISBN: 978-0-275-99549-2 (set) 978-0-275-99551-5 (vol. 1) 978-0-275-99553-9 (vol. 2) First published in 2009 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10

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Contents

Preface

vii Robert B. Hudson I.

The Financial World of the Boomers

1.

Boomers and the Many Meanings of Work Michael A. Smyer, Elyssa Besen, and Marcie Pitt-Catsouphes

2.

Redesigning Work for an Aging Labor Force: Employer and Employee Perspectives Diane S. Piktialis

3.

Entrepreneurship Strategies in Later Life Edward G. Rogoff

4.

Planning for the Boomers’ Future: The Emergence of Financial Gerontology Neal E. Cutler

5.

Living and Leaving: Financial and Estate Planning for Boomers Donald Ray Haas II.

6.

7.

3

17 33

45 63

The Civic World of the Boomers

Providing New Opportunities for Volunteerism and Civic Engagement for Boomers: Chaos Theory Redefined Laura B. Wilson and Karen Harlow-Rosentraub

79

Gearing Up for the Big Show: Lifelong Learning Programs Are Coming of Age Ronald J. Manheimer

99

vi

8.

9. 10.

Contents

Booming Opportunity: Philanthropy, Aging, and Recognizing That the Glass Is Half Full Robert Martin and Alan Pardini Evaluating Images of Aging in Print and Broadcast Media Maria D. Vesperi

125

Better Together: Generational Reciprocity in the Real World Donna M. Butts and Jaia Peterson Lent

145

III. 11.

113

The Social World of the Boomers

Living Large while Living Small: The Spatial Life of Aging Boomers Philip B. Stafford

169

12.

Getting Around: Meeting Aging Boomers’ Mobility Needs Lisa J. Molnar and David W. Eby

13.

Multigenerational Bonds, Family Support, and Baby Boomers: Current Challenges and Future Prospects for Elder Care Judith G. Gonyea

213

Who Will Care? Building the Geriatric Long-Term Care Labor Force Mary F. Harahan and Robyn I. Stone

233

14.

189

About the Editor and Contributors

255

Index

263

Preface

H

aving grown from infancy through adolescence to adulthood, 76 million baby boomers are now about to enter old age. In the course of their lifetimes, the boomers have forced double shifts in elementary schools, generated an enormous growth in higher education, created new consumer markets, and enjoyed historically unprecedented levels of prosperity. Having massively impacted every social institution they have encountered thus far, the boomers are widely expected to revolutionize old age as well. The two volumes that comprise Boomer Bust? Economic and Political Issues of the Graying Society examine in great detail what the boomers will look like in old age, how they are likely to behave, and the impact they may have on the larger society. There is no question that the boomers will comprise the largest cohort of older Americans ever, but beyond numbers alone there are many unknowns about the actual effect they may have (or be associated with or blamed for). Because of their very size, the boomers may displace or replace other age groups in various roles (workers, consumers, caregivers, voters, Social Security recipients), but questions remain about how singularly they will behave and how salient their generational impact will be. Despite their iconic demographic standing, the boomers by no means all look the same, and equally important, they also very much resemble people from other generations in obvious ways. Boomers and nonboomers alike are male or female, black or white, rich or poor, urban or rural, healthy or ill. In short, the world of the boomers is marked both by intracohort differences and intercohort similarities. These interrelated attributes—cohort size, cohesion, and distinctiveness— are central to any discussion about the impact the boomers are likely to have on American life. A number of critical questions flowing logically from this formulation are addressed in the chapters that follow:

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• How singularly will the boomers behave in old age? • How different will they be from older and younger people? • How important will their age (the effect of how old they are) and their generation (the effect of when they were born) be in affecting their late-life behavior? • Will there be just one boomer cohort or a ‘‘first wave’’ and a ‘‘second wave’’? • Will younger generations resent the size and standing of older boomers? • Will boomers be a healthier older cohort even though they are living longer? • Does the rise of ‘‘productive aging’’ mean that elders will become net contributors to the social and economic resource base or will they continue to be draws on it? • How many older boomers will be care recipients, care providers, or both? • Will older boomers work longer, or will they enjoy longer retirement, or both? • Can boomers save and invest enough for a decent retirement? • Will the boomers contribute to or hinder future economic growth? • Will older boomers be ‘‘the most powerful lobby in Washington’’?

How the larger society and the boomers themselves understand their needs, contributions, and standing will very much affect how the nation responds to the boomers’ imposing presence. The boomers in old age will represent complete realization of the institutional standing older people have come to assume in American life over the past half-century. No longer a marginal presence, seniors today (and certainly tomorrow) are demanding and receiving recognition of their new prominence. A range of societal institutions are being forced to accommodate the older people’s new preferences and concerns. Employers are wrestling with a rising need to retain older workers after years of easing them out the door; families are struggling with growing ‘‘work/family’’ pressures as older relatives require care and attention in unprecedented numbers; communities are realizing that long-established housing and transportation patterns (many generated by the boomers earlier in life) are not congruent with the needs and preferences of older residents; and government is confronted with the costs associated with pension and health care policies that are expected to grow at what many consider to be an alarming rate. How society will respond to the boomers in old age raises a host of additional questions: • Will there be a labor shortage when boomers retire, and how will society respond? • How willing are employers to retain and recruit older workers? • Under what circumstances will the boomers be willing to work in late life? • How will erosion of retired employee health care insurance affect late-life work? • Can Social Security survive the boomers in retirement? • Can increases in health care expenditures be contained as the boomers age? • Will older boomers be the victims of age discrimination, or will they be the beneficiaries of age affirmation?

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• Can communities modify transportation and housing policies to accommodate the needs and desires of aging boomers? • Will there be a geriatric labor force in place able to meet the needs of very old boomers? • How will families adjust to the combination of more older relatives, fewer children, and more adult members in the labor force?

The separate volumes of Boomer Bust? examine these questions from two overarching perspectives. Volume 1 takes a ‘‘macro view,’’ assessing the presence of the boomers from a societal perspective. How may the boomers impact society, and how is society likely to respond? What are the critical demographic, economic, political, and policy considerations to be kept in mind? Volume 2 is directed more to the boomers themselves. How should they think about extended work lives, retirement, and retirement planning? What other roles are there for them, and how can they contribute through civic engagement, volunteering, late-life learning, and working intergenerationally? How will older boomers get around, adapt to new or existing communities, and be cared for when health care needs arise? Volume 2 is divided into three parts, addressing the financial, civic, and social worlds that older baby boomers will both shape and encounter. Borrowing from both psychology and survey data, chapter 1 explores the ‘‘meaning of work’’ for older boomers. Some boomers will want to work, some will have to work, some will want or have to work selectively. This chapter provides a subjective perspective on boomers’ feelings about continued work and calls for more flexible attitudes and responses by potential employees and employers alike. Chapter 2 provides the employer’s perspective on the older worker question. The chapter reviews a number of successful and innovative programs that different employers have devised in order to recruit and retain workers who can meet the marketplace-based needs of these companies. Keeping rather than shedding older workers requires a fundamental change in employer orientation, and the companies cited in this chapter are making that transition. Chapter 3 delves into a world that combines the employer and employee roles, namely, that of the entrepreneur. The chapter reviews literature and experience pointing to what it takes for an older adult to start a remunerative enterprise, looking at both the individual and contextual factors that contribute to success onto this potentially perilous terrain. The next chapter introduces the reader to the emerging field of ‘‘financial gerontology.’’ The author and others involved in this field are providing training in both gerontology and finance (with an emphasis on the former) to assure that financial advisors understand life-course and multigenerational issues as well as purely financial ones in assisting boomers into successful retirement. Chapter 5 presents the perspective of an experienced financial gerontologist, who provides a series of pointers and admonitions directed at aging boomers contemplating the uncharted financial waters that await them.

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Part 2 explores the emerging world of civic involvement and how the boomers may contribute to it. Much has been made recently of Americans’ declining levels of civic engagement, and a number of commentators see an especially useful role for older people in slowing or reversing that trend. Chapter 6 reviews the experience of a number of programs in involving older people in various civic roles. The chapter speaks to ways of instilling commitment and makes particular note of the need to take advantage of today’s elders’ skills in order to both gain their commitment and maximize their contributions. The following chapter provides the reader with a detailed picture of late-life learning programs. Population aging and the higher levels of educational attainment found among today and tomorrow’s elders have led to an enormous expansion of what were once fairly marginal adult education programs. Today’s offerings cater to a wider variety of interests and needs, and one model in particular—late-life learning institutes—is featured in this review. Chapter 8 introduces the important work of philanthropic foundations in promoting the civic engagement agenda. Long focused on the needs of frail and vulnerable seniors, foundations are increasingly turning their attention to tap the potential and contributions of an emerging cohort of seniors to ‘‘give back’’ to society in various ways. The work of these philanthropies helps animate the productive aging paradigm set forth in chapter 3 of volume 1. Chapter 9 presents a fascinating review of ‘‘images of aging in print and broadcast media.’’ The chapter finds that an earlier media stereotype of elders being portrayed as poor and frail is increasingly being replaced by one in which elders are active, productive, and consuming. Beyond documenting this shift, the chapter explores whether these ‘‘new’’ aging images will make boomers appear to be civically inclined and generous or consumer-driven and selfish. In either case, the needs and place of frail elders may fade from the media scene much as some would like them to fade from the public policy scene. Chapter 10 sets its sights on the contributions seniors are making and boomers are about to make in promoting intergenerational activity. This chapter emerges as something of a ‘‘best practices’’ companion to the broader intergenerational policy chapter found in volume 1. Here, the authors demonstrate how a variety of state and municipal programs work to the mutual advantage of elders, youths, and the communities in which they live and contribute. Volume 2’s third and final part focuses on the social world of the boomers, that is, how they lead and manage their lives. Chapter 12 reviews an extensive literature on migration, environmental design, and housing alternatives, each pursuant to the question of how good a fit they will be to the boomers’ looming and various needs and preferences. Importantly, existing trends suggest there will be more aging-in-place than migration, perhaps creating what the author refers to as ‘‘elderburbias.’’ Chapter 13 presents a detailed analysis of the transportation habits, needs, and challenges facing an aging population. Prior to ‘‘taking the keys away,’’ can older driver training, vehicle technology,

Preface

xi

and roadway design enhance the ability of older drivers to stay behind the wheel safely? Related to but beyond that question, the chapter also addresses what are the prospects for mass transit, paratransit, and other transportation alternatives that might serve elders in a responsive and respectful way. The final two chapters of the volume address the looming question of caring for frail elders. Much literature—including a good deal in these volumes—focuses on the abilities and contributions that may be made by an emerging population of healthy and potentially wealthy boomers. Not to be lost is a current population of generally ‘‘older-old’’ individuals faced with an array of chronic illnesses and disabilities and, more to the point here, a future large population of very old boomers who will suffer from many of these same afflictions (though perhaps at a lower prevalence rate). Chapter 14 places the caregiving dilemma in the family context, investigating how the changing makeup of families (more living generations, fewer members of each generation, new roles for emerging generations) will affect the ability to provide so-called informal care, which constitutes roughly 80 percent of long-term care provision in the country. Given emerging pressures on public policies—covering the other 20 percent—the arithmetic does not look good, and levels of caregiver stress and burden are expected to rise. Chapter 15 presents equally distressing forecasts for the formal long-term care arena. There are already major shortages in the geriatric labor force—physicians, nurses, social workers, care managers, frontline workers—and the demand–supply imbalance is expected to deteriorate over time. The shortage of frontline workers—due in part to low pay, poor working conditions, lack of career paths—may prove especially dire, and in long-term care, that is very much ‘‘where the rubber meets the road.’’ The contributors to both volumes come from a rich array of academic, research, foundation, and frontline organizations involved with investigating and improving the lives of seniors. I am indebted to each of these contributors for their care and diligence in preparing these chapters and, in particular, for directing their attention to the older boomer question. Because most boomers are not yet old, this task is not as straightforward as it might first appear. Through modeling, extrapolation, and historical and longitudinal investigation, these authors have succeeded in giving informed and nuanced appraisals of how the boomers may fare in tomorrow’s economic and political worlds and how those worlds may experience them, the largest old-age population in history. Among many others who assisted me in organizing these volumes, I would like to thank my colleague Judith Gonyea for the clarity of her conceptual thinking around the project’s overall organization and Jeff Olson from Praeger Publishers, who shepherded these materials through the labyrinthian approval and production process. As always, thanks to my wife Perry (who believes rounding up academics is like herding cats) and my stepson Tim (who thinks none of us works hard enough).

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I THE FINANCIAL WORLD OF THE BOOMERS

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Boomers and the Many Meanings of Work MICHAEL A. SMYER, ELYSSA BESEN, AND MARCIE PITT-CATSOUPHES

W

hy do baby boomers work? The answers to this question are important for baby boomers themselves, for their family members and friends, and for their current or potential employers. In this chapter, we will review the boomers’ underlying motivations for work. As we do so, we will keep in mind two simple questions: In what ways are the boomers similar to others at a similar age in different historical and social contexts? In what ways are the boomers a distinctive cohort with motivations that differ from other generations? Throughout, we will try to depict the various motivations that affect the decisions of millions of boomers regarding work in mid- and later life. As one ages, career plans subtly shift from a goal orientation to a focus on time-left-at-work. For most people, regardless of cohort or generation, this is part of a larger process of shifting a sense of personal and professional time from how much time has passed to how much time is left (Carstensen 2006). At the same time, midcareer and late-career workers may be responding to their own sense of changes (both gains and declines) in their physical capacities, cognitive and emotional functioning, and social roles (Sterns and Huyck 2001). This shifting sense of time also affects the meaning attached to work for young, middle-aged, and older workers. But the career plans and meanings of work for early-, mid- and late-career workers don’t develop in a vacuum. Some sociologists have focused on the influence of the ‘‘triple helix’’ of occupation, family, and leisure on career

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THE BOOMERS AND THEIR FUTURE

development and the meanings of work across the life span (Rapoport and Rapoport 1980; White 1995). Others have suggested that there are ‘‘three boxes of life’’: education, work, and leisure (Riley, Kahn, and Foner 1994). Through much of the twentieth century, these boxes were more or less completed in a linear fashion. Education occurred at the outset of life; work carried one through midlife and into early old age; and leisure became synonymous with retirement. Although this sequence is orderly, it no longer reflects the fluid nature of the life course in contemporary society (Achenbaum and Cole 2007; Hudson 2007). Today, women and men enter and exit education, work, and leisure at different points (and often simultaneously) across the life span, and family demands also affect the three boxes. Thus, the meanings of work for boomers develop in and are changed by a rich context of emotional, economic, social, and familial ties across the life span. As depicted in figure 1-1, baby boomers accounted for approximately 40 percent of the U.S. labor force in 2007. On January 1, 2008, the first of the baby boomers reached age 62, the age of early entitlement for Social Security, thus enabling some of them to begin entering retirement. Yet, while some boomers may choose to retire, others are expected to remain in the workforce long after the traditional age of retirement. As a result of these boomers aging and remaining in the workforce, it is expected that in 2015 workers aged 55 and over will make up nearly 20 percent of the total U.S. workforce (Bureau of Business Practice 2002). The Government Accountability Office (GAO) has suggested that making an effort to keep the older baby boomers in the workforce may be of great value to employers. Baby boomers bring experience and knowledge to the workplace and, with the passage of every year, industries are at risk of losing a valuable cohort of workers (Bureau of Business Practice 2002; Walker 2007). For employers to retain their skilled boomer workers, though, it is important that they understand why boomers work.

FIGURE 1-1. Percentages of Employed Americans, by Generation, 1977 and 2007 Source: McNamara 2007.

Boomers and the Many Meanings of Work

5

In summary, baby boomers started envisioning the meaning of work early in their careers and they continue to reinvent those meanings across the life course, reflecting in part the aging process itself. Simultaneously, the social structures of work, family, education, and leisure have themselves changed across the latter part of the twentieth century, again affecting the meaning of work for boomers. Finally, the societal context is significant, including both public policy and macroeconomic developments, shaping the contours of the meanings of work across the life span. A FRAMEWORK FOR THE MEANINGS OF WORK Building upon Alderfer’s (1969) earlier theory of human needs, Mor-Barak (1995) proposed four key factors of the meanings of work for older adults: financial, personal, social, and generativity. Mor-Barak linked this formulation to earlier, theoretical works on adult development (e.g., Erikson 1956) and to an empirically validated sixteen-item Meaning of Work Scale (MorBarak 1995). She outlined the key characteristics of each area: • • • •

Financial: income and benefits associated with work Personal: self-esteem and personal pride and satisfaction Social: receiving status and respect, along with socializing Generativity: passing knowledge and skills to younger generations

Dendinger and her colleagues applied this framework to boomers’ reasons for choosing ‘‘bridge employment’’ instead of complete retirement (Dendinger, Adams, and Jacobson 2005). They found that generativity was a reliable predictor of boomers’ job satisfaction and attitudes toward retirement, while social aspects predicted attitudes toward retirement. Loi and Shultz (2007) also used Mor-Barak’s approach and scale to differentiate among differing motivations for subgroups of older adults (ranging from 40 to 70-plus). They found that the financial factors were the key to differentiating among six subgroups of older adults in the transition from full employment to full retirement. We will use Mor-Barak’s conceptual scheme as an organizing framework for considering the meanings of work for boomers. Since the financial elements are covered elsewhere in these volumes, we will give relatively more emphasis to the other elements. Financial Factors ‘‘Money is the factor. Money. I need to live. I need to be able to put a coat on my back. . . . We’re talking the day to day, the basic living costs.’’ ‘‘I need to work for my health insurance. . . . That’s the main reason.’’1 Understandably, baby boomers’ assessments of the financial resources they have (and those that they anticipate having in the future) affect their

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THE BOOMERS AND THEIR FUTURE

decisions about how long they plan to participate in the labor force. We can summarize financial factors into two categories: health and wealth. Today’s older baby boomers worry about rising costs of living, particularly the costs of health care coverage. The Employee Benefit Research Institute (2004) has found that 43 percent of workers who indicated that they plan to work during ‘‘retirement’’ think they will do so in order to keep health and other benefits. AARP reports that ‘‘43 percent of baby boomers do not expect Medicare to cover most of their health insurance need during retirement’’ (RoperASW 2004, 9). This pattern reflects the linkage between health insurance coverage and employment: 61 percent of health insurance coverage of the nonelderly in 2005 was employment-based insurance (Street 2007). Since private health care insurance is coupled with employment status in the United States, increasing numbers of older workers are weighing the importance of a comprehensive employer-supported health care plan as they decide how much longer to work. Among the respondents to a Conference Board survey who indicated that they do not plan to retire during the next five years, more than half (52 percent) stated that they want to continue to work to keep health benefits and to keep active (Parkinson 2002). Boomers are weighing the health insurance aspects of work at the very time that employers are altering their retiree health benefits. In less than a decade, the percentage of large employers (those having more than 200 employees) offering retiree health benefits declined by half, from 68 percent in 1998 to 33 percent in 2005 (Kaiser Family Foundation and Health Research Educational Trust 2005). Concerns about income and wealth also shape the meanings of work for boomers (Mermin, Johnson, and Murphy 2006). For instance, greater pension wealth is negatively related to older workers’ expectations that they will work full-time after the age of 62 (Pienta and Hayward 2002). Similarly, among the Conference Board survey respondents, two-thirds (68 percent) reported that their decisions strongly reflected financial need (Parkinson 2002). A 2004 AARP study found that 25 percent of baby boomers plan to work in retirement for financial reasons (RoperASW 2004). For these employees, the financial meaning of work is a key element. In the area of finances, as in the other three areas, it is important to remember the diversity of the boomers: although the boomers have been deemed ‘‘one of the most prosperous generations in U.S. history’’ (Congressional Budget Office 2003), a third of the boomers do not own assets (Government Accountability Office 2006). In part, this economic disparity results from the boomers’ employment record, with the highest wage inequality of all recent cohorts at midlife (Hughes and O’Rand 2004). In addition, the economic prospects vary by race, gender, and socioeconomic status (Hughes and O’Rand 2004). Thus, the financial aspects of work may have very different meanings for different subgroups of the boomers. Given the disparities in the health status of racial/ethnic populations in the

Boomers and the Many Meanings of Work

7

United States (Markides and Wallace 2007; Murray et al. 2006), it is not surprising that minority older workers are more likely than their white counterparts to report that health factors affect their retirement decisions. The Conference Board found that among the respondents who stated that they were planning to retire during the next five years, nonwhites (17 percent) were more than twice as likely as whites to say that their health affected their decision. Although financial reasons are not the only motivators for continuing to work, they certainly contribute to the meaning of work for boomers. Personal Factors ‘‘Working makes you feel good about yourself. . . . You’re fundamentally useful and . . . you’re getting up every day and you’re putting that to work.’’ If some boomers continue to work because they have to (for health or wealth reasons), other boomers will continue to work because they want to. Many find personal meaning and self-esteem in their work (Garnitz 2002; Lachman 2004). As Hughes and O’Rand (2004, 10) put it: ‘‘Work is central to the lives and identities of baby boomers. In midlife, nearly nine of ten boomers work, representing the highest employment levels of all cohorts.’’ As shown in figure 1-2, more than half of older adults report personal factors that motivate them to continue working longer. The Cornell Retirement and Well-Being Study found that when asking ‘‘retired’’ individuals who continued to work for pay why they do so, almost half reported that staying active was a motivator to continue working (Moen et al. 2000). A recent study by AARP found that ‘‘91% of the respondents

FIGURE 1-2. Selected Nonmonetary Reasons for Working Longer Source: Adapted from Russell 2003.

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THE BOOMERS AND THEIR FUTURE

say that staying in the workforce keeps them healthy and active, 87% say it is important for their self-esteem, and 62% say they would not feel as good about themselves without a job’’ (AARP 2002, 7). Similarly, Loi and Shultz (2007) found that a major predictor of older adults’ continuing work involvement was their motivation to be current and competitive. ‘‘Feeling valued, appreciated, and respected’’ has played an important role in the meaning of work (Sterns and Huyck 2001, 448). A similar pattern emerged in the Merrill Lynch New Retirement Survey, with 67 percent of the boomers indicating that continued mental stimulation and challenge will motivate them to stay at work (Merrill Lynch 2005). The same survey found that 59 percent of older workers (55 years and older) agreed or strongly agreed that ‘‘A good deal of my pride comes from my work and career,’’ in comparison to 37 percent of those aged 18–34 and 48 percent of those between the ages of 35 and 54. Other research has shown that the life satisfaction of people 65 and over is directly related to employment (Aquino et al. 1996). As shown in figure 1-3, high job satisfaction increases with age. Here, again, though, we must be wary of assuming that a single pattern captures the range of boomers’ experience. Social class and economic disparities, gender, and racial differences can all contribute to differences in personal resources as the boomers reach old age (Furstenberg 2003; Settersten 2007). For example, in the New Retirement Survey, boomer men indicated that they were looking forward to working less, relaxing more, and spending more time with their spouse. Boomer women, in contrast, saw this phase of life as a time for additional career development, community involvement, and continued personal growth (Merrill Lynch 2005). Hughes and O’Rand

FIGURE 1-3. Job Satisfaction Levels in the Workforce by Career Stage Source: Shen, Pitt-Catsouphes, and Smyer 2007.

Boomers and the Many Meanings of Work

9

(2004) echo this assessment as they point out two countervailing trends in work among boomers at midlife: a steady increase in women’s employment and a less dramatic decline in men’s employment. Social Factors Social relationships are one of the key predictors of well-being for boomers at midlife (Lachman 2004; Markus et al. 2004). Boomers’ ‘‘convoy’’ of social support is likely to include family members and coworkers (Antonucci, Ajrouch, and Birditt 2007). For example, a 2004 AARP survey found that boomers mentioned relations with family members and friends more frequently than any other topic. In addition, in the same survey, when asked to name the best thing in their lives, almost twice as many baby boomers (38 percent) listed relationships with family and friends as did older adults (20 percent) (AARP 2004). Results from another AARP survey reflect the key role of the workplace in the social life of boomers: 70 percent of workers 45 and above reported that they think of their coworkers almost as family. In the same study, the ‘‘company you work for’’ was cited as the type of community employees 45 and over feel a strong connection to (AARP 2002). Similarly, a Conference Board survey of older workers found that 29 percent of respondents not planning to retire said that the social network at the workplace was a factor in their decision (Parkinson 2002). The social importance of work for boomers reflects both continuity and change in earlier trends. Twenty-five years ago, Jahoda (1982) pointed out that paid work is not only a key economic element but a central feature of social organization in developed economies. During the last quarter-century, this role has been maintained while other social structures (e.g., family form and function) have changed substantially (Putney, Bengtson, and Wakeman 2007). Hughes and O’Rand summarized the combined impact of these changes: ‘‘We expect that the boomers will extend midlife well into what used to be considered old age. The organization of their lives has already deviated considerably from what was once considered normative’’ (2004, 27). Moen and Altobelli (2007) point out that retirement as a social institution has become an ‘‘incomplete’’ institution, with our language, customs, and rules for retirement or continuation of work no longer clear. At the same time, many boomers want the social connections that jobs or organized activities provide. Family functioning has also changed. Demographic changes (e.g., fewer children, longer lives) have led to a ‘‘beanpole’’ family structure, with fewer resources available within each generation and greater intergenerational reliance (Bengtson, Rosenthal, and Burton 1990; Putney, Bengtson, and Wakeman 2007). Rather than an empty nest for boomers facing the work–retirement transition, they now find themselves in what has been termed a ‘‘cluttered nest’’ (Putney, Bengtson, and Wakeman 2007). The Conference Board survey documented the

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THE BOOMERS AND THEIR FUTURE

‘‘cluttered nest,’’ with many older workers juggling caregiving and work responsibilities: 23 percent of older workers provided care for a parent, 22 percent for a spouse, and 21 percent for a school-age child (Parkinson 2002). A 2004 AARP survey documented that boomers anticipate that caregiving—for both parents and children—will be part of their responsibility: 35 percent of boomers have been or are responsible for the care of their elderly parents (up from 26 percent in 1998), 19 percent expect to have an aging parent or in-law living with them during retirement, 18 percent expect to provide financially for an aging parent or in-law, and 17 percent expect to provide financially for their children (RoperASW 2004). As with other factors, there are gender and ethnic differences in the ways that social factors influence the meanings of work for boomers (see, e.g., Burr and Mutchler 2007; Moen and Altobelli 2007). For example, drawing on data from the Cornell Retirement and Well-Being Study, Dentinger and Clarkberg (2002) found that wives and husbands responded in different ways when facing spousal care responsibilities: wives were more likely to retire to do this care work; husbands tended to stay at work, perhaps hiring others to provide the care. Generativity Factors Mor-Barak’s (1995) fourth theme, generativity, builds upon earlier work in developmental psychology regarding age-appropriate developmental tasks. Erik Erikson, in particular, popularized the idea that there is a synergy between developments in social institutions and individuals’ own personality development in midlife (Erikson 1963). He suggested that there is an ageappropriate attention to giving back and providing for other generations as one reaches midlife. According to him, the midlife stage of development was characterized by the challenge of ‘‘generativity vs. stagnation,’’ in which people either work to guide the next generation or regress into a state of boredom and unproductive behavior (Erikson 1968). Since Erikson’s original formulation, many scholars have assessed the processes and outcomes of personality change and constancy in midlife (see Jones, Whitbourne, and Skultety 2006 for a summary of work focused on baby boomers). While issues of generativity may arise in midlife for any generation, there is reason to think that baby boomers may be particularly concerned with their lasting impact. Andrew Achenbaum, a noted gerontologist has summed it up well: ‘‘Boomers think, ‘I have to feel that I am accomplishing something; I really am concerned about legacy.’ Legacy has always been a minor motif, but it’s going to be major with the boomers’’ (quoted in Greenblatt 2007, 868). Research has shown that the middle years are expected to be the most generative time for adults (McAdams, Aubin, and Logan 1993). There are indications that this transformation is already under way for boomers. The Merrill Lynch New Retirement Survey found that boomers are now ten times

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more likely to ‘‘put others first’’ (43 percent) than to ‘‘put themselves first’’ (4 percent) (Merrill Lynch 2005). Similar themes emerged from recent AARP surveys: 89 percent feel that their job ‘‘makes a contribution to society or helps people’’ (AARP 2002), while 51 percent of boomers reported in another survey that they expect to devote more time to community service and volunteering in retirement (RoperASW 2004). There is a link between boomers’ concerns with giving back and their duties at work. Recent analyses suggest that workplace flexibility policies, such as reduced hours or compressed workweeks, affect rates of volunteering among older workers. Employed older workers are more likely to volunteer and volunteer more hours when they have access to time flexibility at work (Havens and McNamara 2007). Since older workers indicate a preference for reduced hours at work (Parkinson 2002), employers might find time flexibility to be a useful retention tool that allows boomers to give back to their communities. RETIREMENT As boomers have begun to reach the traditional retirement age, they are seeking to transition into new work roles as opposed to leaving the workforce altogether. A recent survey found that approximately 80 percent of baby boomers anticipated working at least part-time past the traditional retirement age (Merrill Lynch 2005). A recent analysis of data from the Health and Retirement Study confirms that a majority of older Americans with career jobs retire gradually, in stages, using ‘‘bridge jobs’’ or working less than full-time (Cahill, Giandrea, and Quinn 2006). Boomers report that they want more flexibility in their jobs, allowing them to phase into retirement by working fewer hours, fewer days a week. These results reflect what demographers have labeled a ‘‘redistribution of work’’ across the life span (Vaupel and Loichinger 2006). This redistribution is also affecting boomers’ perceptions of the meaning of work and views about retirement. Employers, though, are not necessarily responding to their boomer employees’ wishes. Over the last twenty years, the ‘‘risks of aging’’ have been increasingly shifted to the individual (Hudson 1999). At work, this is most clearly seen in the dramatic shift from defined benefit to defined contribution pension plans (Munnell and Perun 2006). A similar shift is under way in the area of retiree health benefits. This change in the retirement benefit structure may affect how long baby boomers plan to remain in the workforce and what their motivations to continue working will be. CONCLUSION As baby boomers and their employers consider work and retirement issues, it is important to recognize that there are many meanings of work for the boomer generation—one size definitely does not fit all. Some boomers may

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have to work (for health or wealth), others may want to (for social contact or to give back to the next generations). These motivations reflect an intersection of both general developmental trends that affect individuals in midlife and the distinctive social and historical experience of this boomer cohort. The challenge for boomers and their employers will be how to craft employment options that help boomers find meaning in work, while helping their employers weather the demographic storm of the boomers’ generational aging. NOTES Grants from the Center for Retirement Research at Boston College and the Alfred P. Sloan Foundation supported work on this chapter. 1. The quotes used in this chapter are drawn from comments made in focus groups sponsored by the Center on Aging and Work during spring 2006. Those attending were age 50 and older, seeking employment or recently retired, and seeking new activities for their postretirement years.

REFERENCES AARP. 2002. Staying ahead of the curve: The AARP Work and Career Survey. Washington, DC: AARP. ———. 2004. Boomers at Midlife: The AARP Life Stage Study, Wave 3. Washington, DC: AARP. Achenbaum, W. A., and T. R. Cole. 2007. Beyond the three boxes of life: Transforming age-based policies to meet fluid life course needs. In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. Pruchno and M. A. Smyer. Baltimore: Johns Hopkins University Press. Alderfer, C. P. 1969. An empirical test of a new theory of human needs. Organizational Behavior and Human Performance 4:142–75. Antonucci, T. C., K. J. Ajrouch, and K. Birditt. 2007. Social relations in the third age: Assessing strengths and challenges using the convoy model. In Annual review of gerontology and geriatrics, vol. 26, The crown of life: Dynamics of the early postretirement period, ed. J. James and P. Wink, 193–209. New York: Springer. Aquino, J., D. Russell, C. Cutronoa, and E. Altmaier. 1996. Employment status, social support, and life satisfaction among the elderly. Journal of Counseling Psychology 43 (4): 480–89. Bengtson, V., C. Rosenthal, and L. Burton. 1990. Families and aging: Diversity and heterogeneity. In Handbook of Aging and the Social Sciences (3rd ed.), ed. R. H. Binstock and L. K. George, 263–87. San Diego: Academic Press. Bureau of Business Practice. 2002. Aging baby boomers pose challenges for employers. Compensation & Benefits Report 16 (1): 1–2. Burr, J. A., and J. E. Mutchler. 2007. Employment in later life: A focus on race/ethnicity and gender. Generations 31 (1): 37–44. Cahill, K. E., M. D. Giandrea, and J. F. Quinn. 2006. Retirement patterns from career employment. Gerontologist 46 (4): 514–23.

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Carstensen, L. 2006. The influence of a sense of time on human development. Science 312 (5782): 1913–15. Congressional Budget Office. 2003. Baby boomers’ retirement prospects: An overview. Washington, DC: Congressional Budget Office. Dendinger, V. M., G. A. Adams, and J. D. Jacobson. 2005. Reasons for working and their relationship to retirement attitudes, job satisfaction, and occupational selfefficacy of bridge employees. International Journal of Aging & Human Development 61 (1): 21–35. Dentinger, E., and M. Clarkberg. 2002. Informal caregiving and retirement timing among men and women. Journal of Family Issues 23:857–79. Employee Benefit Research Institute (EBRI). 2004. Will Americans ever become savers? The 14th Retirement Confidence Survey. EBRI Issue Brief No. 268. Available at http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=496. Erikson, E. H. 1956. Identity and the life cycle. New York: W. W. Norton. ———. 1963. Childhood and society. 2nd ed. New York: W. W. Norton. ———. 1968. Identity, youth, and crisis. New York: W. W. Norton. Furstenberg, F. F., Jr. 2003. Reflections on the future of the life course. In Handbook of the life course, ed. J. T. Mortimer and M. J. Shanahan, 661–70. New York: Kluwer Academic/Plenum. Garnitz, R. N. 2002. Semi-retirement: A practical alternative for boomers. Employee Benefits Journal 27 (2): 51–53. Government Accountability Office. 2006. Baby boom generation. Washington, DC: Government Accountability Office. Greenblatt, A. 2007. Aging baby boomers. CQ Researcher 17 (37): 865–88. Havens, J., and T. McNamara. 2007. Civic engagement: Volunteering dynamics and flexible work options. Issue Brief 07. Chestnut Hill, MA: Boston College Center on Aging and Work. Hudson, R. B. 1999. Conflict in today’s aging policy: New population encounters old ideology. Social Service Review 73 (3): 358–79. ———. 2007. The political paradoxes of thinking outside the life-cycle boxes. In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. Pruchno and M. A. Smyer, 268–84. Baltimore: Johns Hopkins University Press. Hughes, M. E., and A. M. O’Rand. 2004. The American people, Census 2000: The lives and times of the baby boomers. New York: Russell Sage Foundation. Jahoda, M. 1982. Employment and unemployment: A social-psychological analysis. Cambridge: Cambridge University Press. Jones, K. M., S. K. Whitbourne, and K. M. Skultety. 2006. Identity processes and the transition to midlife among baby boomers. In The baby boomers grow up: Contemporary perspectives on midlife, ed. S. K. Whitbourne and S. L. Willis, 149–64. Mahwah, NJ: Lawrence Erlbaum Associates. Kaiser Family Foundation and Health Research Educational Trust. 2005. Employer health benefits: 2005 annual survey. Menlo Park, CA: Kaiser Family Foundation and Health Research Educational Trust. Lachman, M. 2004. Development in midlife. Annual Review of Psychology 55: 305–31. Loi, J. L., and K. S. Shultz. 2007. Why older adults seek employment: Differing motivations among subgroups. Journal of Applied Gerontology 26 (3): 274–89.

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Markides, K. S., and S. P. Wallace. 2007. Minority elders in the United States: Implications for public policy. In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. Pruchno and M. A. Smyer, 193–216. Baltimore: Johns Hopkins University Press. Markus, H. R., C. D. Ryff, K. Curhan, and K. Palmersheim. 2004. In their own words: Well-being at midlife among high school and college-educated adults. In How healthy are we: A national study of well-being in midlife, ed. O. G. Brim, C. D. Ryff, and R. Kessler, 273–319. Chicago: University of Chicago Press. McAdams, D. P., E. Aubin, and R. L. Logan. 1993. Generativity among young, midlife, and older adults. Psychology and Aging 8 (2): 221–30. McNamara, T. K. 2007. [Analysis of the March 1977 and 2007 Current Population Surveys.] Unpublished raw data. Mermin, G. B. T., R. Johnson, and D. Murphy. 2006. Why do boomers plan to work so long? Washington, DC: Urban Institute. Merrill Lynch. 2005. ‘‘The New Retirement Survey’’ from Merrill Lynch reveals how baby boomers will transform retirement. Press release, February 22. Available at http://www.ml.com/index.asp?id=7695_7696_8149_46028_46503_46635. Moen, P., and J. Altobelli. 2007. Strategic selection as a retirement project: Will Americans develop hybrid arrangements? In Annual review of gerontology and geriatrics, vol. 26, The crown of life: Dynamics of the early postretirement period, ed. J. James and P. Wink, 61–81. New York: Springer. Moen, P., W. Erickson, M. Argarwal, V. Fields, and L. Todd. 2000. The Cornell Retirement and Well-Being Study. Ithaca, NY: Bronfenbrenner Life Course Center at Cornell University. Mor-Barak, M. E. 1995. The meaning of work for older adults seeking employment: The generativity factor. International Journal of Aging & Human Development 41 (4): 325–44. Munnell, A. H., and P. Perun. 2006. An update on private pensions. Issue in Brief, No. 50. Chestnut Hill, MA: Center for Retirement Research at Boston College. Murray, C. J. L., S. C. Kulkarni, C. Michaud, N. Tomijima, M. T. Bulzacchelli, T. J. Iandiorio, and M. Ezzati. 2006. Eight Americas: Investigating mortality disparities across races, counties, and race-counties in the United States. Public Library of Science: Medicine 3 (9): e260. Parkinson, D. 2002. Voices of experience: Mature workers in the future workforce. New York: Conference Board. Pienta, A. M., and M. Hayward. 2002. Who expects to continue working after age 62? The retirement plans of couples. Journal of Gerontology: Social Sciences, 57B (4): 5199–5208. Putney, N. M., V. Bengtson, and M. A. Wakeman. 2007. The family and the future: Challenges, prospects, and resilience. In Challenges of an aging society: Ethical dilemmas, political issues, ed. R. Pruchno and M. A. Smyer, 117–55. Baltimore: Johns Hopkins University Press. Rapoport, R., and R. N. Rapoport. 1980. Balancing work, family and leisure: A triple helix model. In Work, family, and the career, ed. C. B. Derr. New York: Praeger. Riley, M. W., R. L. Kahn, and A. Foner, eds. 1994. Age and structural lag: Society’s failure to provide meaningful opportunities in work, family, and leisure. New York: John Wiley.

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RoperASW. 2004. Baby boomers envision retirement II: Survey of baby boomers’ expectations for retirement. Washington, DC: AARP. Available at http://research.aarp.org/ research/work/retirement/aresearch-import-865.html. Russell, D. 2003. Employment and income security in an aging world: A United States perspective. Available at http://www.aarp.org/research/international/a200302-11-russell.html. Settersten, R. A., Jr. 2007. 10 reasons why shake-ups in the life course should change approaches to old-age policies. Public Policy & Aging Report 17 (3): 1, 21–27. Shen, C., M. Pitt-Catsouphes, and M. Smyer. 2007. National Study of the Changing Workforce. Unpublished raw data, Families and Work Institute. Sterns, H. L., and H. Huyck. 2001. The role of work in midlife. In Handbook of midlife development, ed. M. Lachman, 447–86. New York: John Wiley & Sons. Street, D. 2007. Too much, too little, just right? Policy disconnects in an aging society. Public Policy & Aging Report 17 (3): 7–10. Toossi, M. 2005. Labor force projections to 2014: Retiring boomers. Monthly Labor Review 128 (11): 25–44. Vaupel, J. W., and E. Loichinger. 2006. Redistributing work in aging Europe. Science 312 (5782): 1911–13. Walker, D. M. 2007. Older workers: Some best practices and strategies for engaging and retaining older workers. Testimony before the U.S. Senate Special Committee on Aging. February 28. GAO-07-433T. Available at http://www.gao.gov/new. items/d07433t.pdf. White, B. 1995. The career development of successful women. Women in Management Review 10 (3): 4–15.

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Redesigning Work for an Aging Labor Force: Employer and Employee Perspectives DIANE S. PIKTIALIS

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he Boomer generation grew up during the 1950s and 1960s when retirement and departure from work was becoming a normative life transition typically undertaken by workers in their early to mid-60s. Over the next half-century, average retirement ages gradually declined to a point where the average individual took retirement in his or her late 50s. At the same time, U.S. longevity was increasing, with many individuals living into their 80s and 90s. As the twenty-first century arrived, traditional retirement patterns seemed out of sync with these emerging demographic trends and labor force projections. Many baby boomers have benefited from a longevity ‘‘bonus’’ in ways they never imagined. As they near retirement-eligible age, they are generally healthier and more educated than previous cohorts of pre-retirees (National Institute on Aging 2006). Working in a knowledge economy, they have largely avoided the physical toll manual labor once took. Boomers’ expectations about retirement are also changing. They often want to work in some capacity beyond traditional retirement age for reasons ranging from wanting to stay mentally fit to desiring to stay a ‘‘part of the game’’ to not having saved enough to fund a twenty- or thirty-year retirement (AARP 2003). Many baby boomers who had looked forward to retiring to a life of leisure now realize that the lifelong dream of leaving the workplace isn’t as compelling as they once imagined.

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Employers in many industries face related uncertainties. The baby boom was followed by a ‘‘baby bust,’’ leaving a smaller pipeline of talent than will likely be needed to fill the positions left vacant by retiring boomers. Having spent the last half of the twentieth century designing pensions and policies to encourage late-career employees to retire to make room for younger workers coming up through the ranks, these same employers are coming to realize that their current practices are obstacles to an enterprise’s need to engage, retain, and even recruit mature workers to meet the organization’s business objectives (see figure 2-1). And while a majority of boomers say they want to work in some capacity during their retirement, they do not necessarily want to stay in the same industry or the same job or with the same employer. As a result of these parallel trends, both employers and employees are caught in the crosswinds of two major paradigm shifts. One is changing individual notions of what retirement means and when it happens. Equally dramatic workplace change is under way as many employers realize they need to reverse the trend toward early retirement and manage mature talent to prevent a ‘‘brain drain’’ of knowledge and skills. Throughout this chapter, the terms mature worker, baby boomer, boomer, and older worker will be used interchangeably. A reflection of the changing employer and employee realities, no consensus exists on what to call employees

FIGURE 2-1. U.S. Labor Force Growth within Age Groups, 2004–2014 Source: Bureau of Labor Statistics, Occupational Outlook Quarterly, Winter 2005–2006.

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age 50 and older, an age bracket that covers the majority of baby boomers in the workforce today and by the end of 2014 will include the entire generation. This uncertain terminology is an indication of the profound changes taking place at the intersection of leading-edge boomers and the world of work. EMPLOYER PERCEPTIONS VARY For nearly a decade, labor economists, academics, and others have warned of impending baby boomer retirements and the likely labor shortages they would cause. While some organizations have begun to reexamine the old labor force model that continually replaced older workers with a larger number of younger and better-educated workers, not all have jumped on the bandwagon. In a research report by the Conference Board, Young (2007) explains why not all business leaders see an imperative to make better use of mature workers and why some don’t even have boomers on their radar screen. Only selected industries, job categories, or functions and a handful of industries are affected by an aging workforce at this point in time. Corporate responses to the maturing workforce result from varying perceptions or analyses about its business impact. The concept of the ‘‘continuum of pain,’’ first developed by Young (2004), helps explain why employers vary in whether they view older employees and their approaching retirements as a business issue to be dealt with or an opportunity to be tapped. At one end of this continuum (see figure 2-2), the pain is small and localized: Who will replace Old Joe? At the opposite end, aging and retiring workers are viewed as a national crisis, rather than a company-specific problem. A range of pain levels lies between these two extremes. It may be an issue only in some job categories, in some business units or functions, or in certain industries (Morton, Foster, and Sedlar 2005). The aging workforce presents complex challenges that most organizations have not faced before. Some enterprises have developed adaptive practices to deal with the new workforce realties. With the exception of certain industries such as health care, education, utilities, and transportation, research by the Conference Board and other organizations indicates that few companies are feeling a high level of pain enterprise-wide due to anticipated boomer retirements (Young 2007). More commonly, companies that have assessed and identified specific vulnerabilities in relation to a maturing workforce focus selectively on those critical areas rather than on the entire company. For example, a business may respond to an impending shortage of scientists in the research and development function, yet ignore older workers in the manufacturing facilities because they see no short-term business problems from impending boomer retirements in that function. Other employers are trying to make the business case for change. They realize their firm requires more precise data and planning to ensure adaptations made for boomers will actually address their needs and preferences.

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FIGURE 2-2. Continuum of Pain and Solutions Source: Young 2007. Used with permission.

Regardless of their approach, these organizations share a common characteristic; they are all in the vanguard of modifying the workplace to extend the employment of older workers. EMERGING EMPLOYER PRACTICES AND TALENT MANAGEMENT A company’s success in today’s global economy relies on a winning strategy for talent acquisition and management. Integrated talent management enables the organization to effectively manage talent selection, development, performance, and retention of employees of all ages. For many organizations, mature workers are a key component of the talent equation that must be aligned with strategy, processes, and personnel practices. Talent management of baby boomers and older employees involves the ability to recruit, retain, train and develop, engage, motivate, and manage their performance effectively. Recruitment Organizations facing a shortage of younger workers or desiring to better reflect an aging customer profile have forged innovative solutions to find and hire mature workers. The good news is that research indicates that

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around 70 percent of baby boomers plan to stay in the workforce longer, though not necessarily with their current employer (AARP 2003). These mature workers want a work environment that is free from age bias and where the company promotes a positive attitude toward mature workers. The bad news is how few firms actively recruit older workers. According to a recent Manpower survey, only 18 percent of companies have a strategy for recruiting mature workers (Manpower 2007). Employers in the vanguard of hiring maturing workers have begun to experiment with new approaches. One firm considered a pioneer in recruiting older workers is the 45-year-old pharmacy retail chain CVS Caremark. CVS actively recruits older workers for entry-level positions such as clerks, pharmacy assistants, and photo lab technicians as well as for management positions (Young 2007). It offers these employees part-time, flexible schedules. A recent innovation also allows employees flexibility in their place of work. Some older workers, known as ‘‘snowbirds,’’ prefer to winter in warmer climates. A University of Florida study estimated that 818,000 snowbirds descended on the state during the peak of the 2005 winter season (Ruane 2007). Under the CVS program, these winter migrants can work part-time during the winter months for the same employer but at their winter home (Piktialis and Morgan 2002). Other retailers such as Home Depot and Bealls and the hospital network Lee Memorial Health Systems have followed CVS Caremark’s successful model and instituted their own snowbird programs (Ruane 2007). From a business perspective, these programs make bottom-line sense: They provide the company with flexible staffing and provide a trained labor pool in locations that have a large influx of retirees, and customers, in the winter months. CVS Caremark is also considered a pioneer in using national and local partnerships with government and nonprofits to enhance the recruitment of mature workers. In 1993, the company created its Government Programs Department to partner with public-sector and nonprofit workforce development programs to enhance the firm’s recruitment strategy. That strategy aimed to add mature workers to a workforce that had fewer than 7 percent employees over age 50. Fifteen years later, these partnerships have birthed seven regional training centers in proximity to One-Stop Career Centers that have trained more than 10,000 people since 2000 (Young 2007). Employers in other parts of the global economy have also identified older worker recruitment as a strategic priority and successfully launched initiatives to attract this demographic into their firms. Westpac Banking Corporation in Australia and New Zealand stands out in this respect. In 2002, Westpac made public a campaign to attract up to 900 mature workers over the following three years. Driven by changing demographics, especially an aging society, the bank realized it must change hiring practices to match this new labor force and aging customer base. The initial campaign targeted 46- to 55-yearolds, but the bank also seriously considered applicants over age 55.

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Westpac and its recruitment agency, Hudson, soon learned that vigorous outreach was necessary to counteract the older population’s passive jobseeking behaviors. Westpac employed display advertisements in newspapers to promote an open day at one of its major centers and other such events. Within nine months, the efforts had resulted in four hundred new employees. The initiative was then strengthened by additional approaches. The most significant were partnerships with a government agency, the Department of Employment and Workplace Relations, and two nonprofits: Business Work and Aging, and the Salvation Army. Finally, Hudson offered a preemployment program called ‘‘A Better Balance.’’ That program, aimed at unemployed workers age 45 and above, was designed to attract, screen, train, assess, and place these individuals in financial services jobs in the greater Brisbane area. Westpac’s recruitment initiative accomplished more than its original goals. Within the three-year time frame, 1,073 mature workers were hired, and by the start of 2006, that number had climbed to 1,206. Slightly more than 80 percent were in the target age range of 45–54, with the remainder ranging up to age 73 (Young 2007). Both CVS and Westpac demonstrate the power of forging partnerships to recruit mature workers. Other companies have taken a different approach, using third-party intermediaries to find and hire mature workers. Your Encore presents a good example of this method. Your Encore is an independent consulting company originally founded by Proctor & Gamble, Eli Lilly, and Boeing to provide experienced scientific and engineering talent on a contract basis to those three companies. Today its customer base has risen to twenty companies. As of January 2007, Your Encore had 2,130 registered experts, about one quarter of who have Ph.D.s. Roughly 30 percent have worked on a project within the past year. Experts come from 600 different companies, although a third has retired from one of Your Encore’s 20 client companies. (Rappaport and Young 2007, 12)

Your Encore matches company project requirements with the skills and expertise on its registered experts, who are typically hired to do project work on a consulting basis. As a third party, Your Encore provides recruitment, quality control, financial and administrative support, and other services. In a third-party scenario, both the employer and the employee benefit. Companies gain access to a ready pool of experienced talent on an as-needed basis without dealing with the legal hassles of hiring retirees directly or the administrative cost of managing many individual contracts. The proof of success is in the numbers. Client satisfaction in Your Encore’s client base runs high, averaging 4.7 on a five-point scale (Rappaport and Young 2007). Other third-party intermediaries that actively target mature workers for a broad range of assignments include Manpower and Kelly Services.

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Retention Retention is another key element of talent management and a salient issue for companies with baby boomers. Some companies focus on retention once they have recruited significant numbers of mature workers into their organization. Other firms face the question of how to engage and retain mid- and late career workers who are long-term employees in their firm. Only 28 percent of U.S. companies have a strategy for retaining long-tenured older workers (Manpower 2007). Staples, a U.S. office products chain, began a campaign to attract employees age 50 and older in 2006 based on research that indicated these employees are interested and skilled in providing customer service. A year later, Staples started a program to help managers understand cross-generational differences as part of its efforts to retain these valued workers (Gardner 2007). Westpac, the Australian bank, found that turnover among its recently hired mature workers was 9.9 percent and even higher for those age 60 and older. The bank’s attention changed to focus on what was needed to get these recruits to stay at the bank. Based on an employee survey of its 45-and-older workers, Westpac undertook several new initiatives to better prepare mature employees for retirement and provide customized flexibility options, and it instituted a knowledge transfer program to retain critical knowledge and free up long-tenured employees to move into different roles (Young 2007).

Managing a Mature Workforce Managing baby boomers is crucial to retaining and engaging them for maximum contribution. Yet many companies neglect to actively manage experienced talent for fear of complex laws and regulations, or because they often assume mature workers have already ‘‘retired in place’’ and are quietly waiting until they can actually retire. For example, a recent survey found that fewer than 20 percent of organizations had asked older workers about their work preferences and intentions—whether career or retirement—for the future (WorldatWork 2007). Research indicates that common employer perceptions of mature workers as ‘‘checked out’’ are unfounded. In 2002, the Conference Board issued a research report entitled Voices of Experience: Mature Workers in the Workforce, based on surveys of 1,600 employees age 50 and over. More than three-quarters of all respondents say they have the same level of intensity approaching their jobs as they did when they were younger. Over 70 percent felt capable of taking on more responsibility, and many others said they would like job enrichment. Two-thirds wanted more training and development opportunities. A clear disconnect is evident between the desires of many mature workers and the way they are commonly managed in the workforce (Parkinson 2002).

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One company that stands out as a positive example is Deere & Co., a 170-year-old Midwestern manufacturer of farm equipment. Deere has no distinct program for mid- and late-career workers, but what it does have is a corporate history of maintaining skills and performance throughout lifelong careers. Within that context, it has applied its career development and performance management systems uniformly regardless of a worker’s age. Deere has a well-established career development system. Long-tenured workers are encouraged to continue learning to stay abreast of new skill-set requirements and to find new career opportunities within the company, just as are younger workers. The company has developed a job bank and a learning management system to allow employees of all ages to search for job opportunities and to evaluate how well they are prepared to apply for specific openings. The system also enables employees to link directly to training and development resources. As part of the company’s performance management, older employees are expected to set clear performance goals and are held accountable for achieving them just as rigorously as are younger employees. In short, Deere has taken strong human resources systems for career and learning management and applied them consistently to all employees, regardless of age. Deere’s results are impressive. Its annual attrition rate for professional employees in the United States is only 2 percent, which is very low by almost any standard. Deere employees aged 50 and older have an average tenure of 24.6 years (Young 2007). Age Diversity Training Many companies have analyzed the age profiles of their companies only to discover they face, or soon will face, a growing number of aging baby boomers. Some also discover a multigenerational workforce with up to four generations working alongside each other. Within the changing workforce, deep-rooted societal biases are as prevalent as in the broader society. Stereotypes such as ‘‘You can’t teach an old dog new tricks’’ or ‘‘That youngster is still wet behind the ears’’ influence employees’ perceptions of coworkers. Moreover, each generation comes to the workplace with different learning styles, preferences, and attitudes toward work that have been molded by salient common experiences as they grew up. Organizations that understand this new dynamic realize the many challenges, as well as opportunities, that come from either large numbers of baby boomers or multiple generations in the workplace (Piktialis 2007). Glaxo Smith Kline (GSK) is one such company. In 2004, GSK participated in a retirement planning survey conducted with several companies by the Conference Board. GSK employees age 50 and above were surveyed to assess the magnitude of risk for the company, to identify possible action that can be taken to ensure knowledge transfer, and to identify ways to support those employees nearing retirement.

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As a result of that research, GSK decided to take a series of actions to increase the engagement of its 50-and-over employees. Several ensuing initiatives recognize the importance of the new multigenerational workforce in addition to aging workers (Byrd 2006). The company • increased education/awareness with on-site seminars, a speaker’s bureau, and a train-the-trainer program focused on generational diversity. A DVD of the training was sent to large field teams unable to access online Web training. • addressed changing demographics in business strategy through inclusion into the human capital and workforce planning for retention strategies. • appointed a senior-level task force with representation from each business unit to address the mature-worker and intergenerational workforce planning issues for their lines of business.

IBM has also pioneered the inclusion of age-related education into its diversity training. In addition to employee training, IBM offers managers and supervisors training in how to lead and manage a mature and multigenerational workforce. Most recently, the company launched a companywide initiative on generational diversity in spring 2007 that included an extensive range of training modules. Companies that dispel age stereotypes and leverage generational differences will benefit from the synergy that improves organizational effectiveness and business performance through improved communication, teamwork, and knowledge transfer. Management Practices Few studies have looked directly at what drives employee engagement for older workers. One such study conducted by Boston College found that supervisor effectiveness plays a salient role in employee engagement in workers 55 and older at both the professional and hourly levels (Swanberg and McKechnie 2007). It also found that most managers of older workers perceived them as engaged. Research into what older workers want in an ideal workplace reveals other workplace characteristics important to mature workers. Mature workers want the respect of other generations and to be valued by their managers and supervisors. They want to be able to plan their careers or their retirements, or both, with openness and support. They want work arrangements that are flexible and benefits that are relevant to their life stage. (Piktialis 2007)

The day-to-day behaviors of an employee’s direct manager or supervisor has been shown to have a more direct impact on whether employees decide

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to stay or leave an organization than programs instituted to foster corporate change. Managerial behavior also plays a salient role in ‘‘presenteeism’’— situations where employees are physically on the job but not functioning at full capacity. Originally coined to describe lost productivity due to healthrelated issues, presenteeism can been used to describe mature workers, who are sometimes disengaged from the workplace and decide to ‘‘retire in place,’’ giving the organization only a minimal level of effort. Baptist Health Systems is an employer that has tried to tap the discretionary effort of older workers with recognition programs. The company has a long-service review committee, whose goal is to make sure that employees who have been with the company fifteen years or more are treated fairly before any adverse action can be taken against them. This committee also helps long-term employees find solutions to work-life issues and develop opportunities for meaningful and developmental assignments. Outcomes include employee work retention, development, and loyalty (Piktialis 2007). Understanding Retirement Intentions Legal statutes and real and perceived regulatory restrictions present barriers that prevent many companies from forging creative responses to retirement and benefit programs. Employer benefits must conform to ERISA (Employee Retirement Income Security Act of 1974), ADEA (Age Descrimination in Employment Act), and the tax code as well as defined benefit plan provisions, if a company has one. As a result, many firms feel limited legally in the extent to which they can innovate programmatically and even in what conversations they can have with mature workers about career or retirement intentions. With age discrimination lawsuits on the rise, existing law poses real and perceived risks to employer change (Piktialis 2007). The Conference Board responded to these business issues with a guidebook, published in 2007, Entitled Putting Experience to Work: A Guide to Navigating Legal and Management Issues Relating to a Mature Workforce. This was a response to concerns many member companies raised in the Conference Board’s Research Working Groups on mature worker issues. The guide ‘‘gives practical management advice and describes some of the legal challenges and alternatives employers face in grappling with mature workforce issues’’ (Weinstein and Kaufman 2007). Companies facing baby boomer retirement risks can no longer take the usual path of ‘‘don’t ask, don’t tell.’’ They must understand their employees’ retirement intentions to know what initiatives might stave off the departure of those who plan to leave within the next few years. Many companies are becoming familiar with research that indicates that being retirement eligible does not mean an employee is retirement prone. An individual employee’s intention to retire is a far more accurate predictor of who and how many employees will actually retire and from what jobs and functions.

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Flexibility Not unlike other employee populations such as working parents or elder caregivers, baby boomers rank flexibility in work arrangements as highly desirable, in part due to their life stage. Interest in career advancement may be waning, replaced by thoughts of either downshifting or retiring. This age cohort increasingly faces caring for parents or other aged family members. Many maturing workers also want to pursue personal interests or give back to the community and are no longer willing to put those pursuits on hold. And most want to spend more time with family and friends. Companies as diverse as the Aerospace Corporation, CVS Caremark, Bonnie Bell, and Dress Barn have adopted flexible work arrangements to address the unique requirements of older workers through reduced schedules, flexible scheduling half-shifts, snowbird programs, and even extended time off for travel or family visits (Piktialis and Morgan 2002). Flexible work arrangements have been a part of business fabric since the 1980s, when women comprised a growing portion of the workforce. And as the CVS example above shows, flexibility can relate to time, place, and even the seasonality of work. A new trend relevant to boomers is the concept of a flexible career model. Sometimes referred to as a ‘‘cyclical’’ career or described as a career with ‘‘on- and off-ramps,’’ proponents of such a work model agree that career paths must take new directions. Examples of this new model are few but growing. Lincoln Financial Group sees flexible careers as a new and important component in creating a fully engaged workforce. The company’s senior vice president of human resources has affirmed the necessity of rethinking how work is structured and how careers are viewed (Morton, Foster, and Sedlar 2005). Restructuring of work may also lead to more flexible benefits. Knowledge Management and Transfer In 2008, the leading edge of the 77 million U.S. baby boomers will turn 62, the age at which they can take early retirement with reduced Social Security benefits. Their impending retirements will result in the loss of knowledge on an unprecedented scale. Additional workforce changes, including mergers, reorganizations, and turnover of midcareer workers, will exacerbate knowledge loss in corporate America. Lost knowledge will adversely impact business goals and result in decreased innovation, lower capacity for growth, and reduced efficiency (DeLong 2004). Research indicates that companies are more likely to be concerned about knowledge transfer than to do anything about it. A majority of companies lack a plan and routine mechanisms for the management and transfer of knowledge in their companies (Young 2007). A 2006 study by Ernst & Young that asked companies about the impact of an aging workforce found that more than six in ten respondents believed that expected retirements

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THE BOOMERS AND THEIR FUTURE

over the next five years would cause a talent gap or ‘‘brain drain,’’ especially in senior and middle-management positions (Ernst & Young 2006). Yet only 29.8 percent of respondents said their organization had attempted to define where its ‘‘business wisdom’’ resides. Just 33 percent reported that their firm had formal practices in place to capture and transmit this business wisdom. A later study by Boston College found that 41 percent had either not developed a knowledge transfer process at all or only done so to a limited extent (Pitt-Catsouphes et al. 2007). Furthermore, those that do have formal practices often overlook the complexities of transferring knowledge across generations. Good intergenerational communication that facilitates the transfer of critical knowledge and interpersonal dynamics between expert and receiver can make or break the success of knowledge transfer. Yet, a 2004 study by the Society for Human Resource Management showed that the second most common reason cited as a cause of intergenerational conflicts was that employees believe other generations don’t respect them (Burke 2004). Another study by Randstad (2006) found that only 56 percent of younger workers relate well to older colleagues. An environment of trust and respect of all generations is a critical ingredient in both giving and receiving knowledge and in applying it successfully later.

SOURCES OF INNOVATIVE PRACTICES For those who want to explore business innovations for mature workers in greater breadth and depth, a few key resources include the following. AARP, once known as the most powerful advocate for older workers, has expanded its focus to include helping employers understand the value of mature workers. For the past six years, AARP has held an annual Best Employees Competition. AARP promotes each year’s winners and their innovative practices through its magazine, newsletters, and website, http://www.aarp.org/money/ careers/employerresourcecenter/bestemployers/. The Center on Aging and Work/Workplace Flexibility at Boston College is a research center that focuses on aging and work. It is conducting a series of studies that are examining the adoption, implementation, and utilization of flexible work options by older workers to provide information to business, academic, and media leaders about workplace flexibility as a response to the aging workforce. For more information, contact [email protected]. The Conference Board (TCB) is a nonprofit organization engaged in business research and analytics to improve the performance of its member companies. TCB has a long history of studying exemplary practices in adapting to the mature workforce. In 2007, the Conference Board launched a Mature Workforce Employer-Practices Locator, a one-stop national resource highlighting employer actions in response to the aging workforce. For more information about Conference Board mature workforce reports, research working groups, or the Employer Practices Locator, go to http://www.conference-board.org.

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Two firms that asked to remain anonymous have begun developing innovative knowledge transfer programs linked to phased retirement pilot programs. One of those companies, a financial services firm, is embedding the transfer of knowledge into a formal phased retirement pilot program. Over a period of approximately twelve months, the individual employee’s regular roles are gradually decreased and replaced by specified knowledge transfer activities. The second company, a global engineering firm, initially targeted key senior leaders and technical talent. Its program involves proactively planning for the time when these key individuals exit the organization, encouraging them to delay retirement. Eligibility is based on recognition of the criticality of professional’s knowledge. Potential participants are identified through the normal succession planning process and career development discussions. Once each key contributor is selected for the program, a transition plan is developed for that individual that includes a detailed schedule to transfer that key professional’s knowledge.

MAKING THE BUSINESS CASE DRIVES CHANGE Corporate America will likely focus increased attention over time on innovative adaptations to baby boomers’ needs, as was true of child care, elder care, and work-life benefits in the 1980s and 1990s. Why should we invest and allocate scarce resources to our mature workers? Will this investment enhance my business performance? Questions such as these may seem heretical to die-hard advocates who promote the benefits of older workers across the board—all older workers, in all industries, and in all jobs. But business decisions are driven by very different factors than those that drive change through public policy or advocacy. Corporate managers want to see hard numbers. They want to know how investing in mature workers will improve the organization’s bottom line and shareholder value. They also want assurance that any actions they take will be legal and pass muster in relation to baby boomers and employees of all ages. Fewer companies than many experts predicted mention the aging workforce as a salient business issue, because they are not currently feeling sufficient pain to make mature workers a burning topic. Even when a company actually does the math, the outcome may not favor older workers. For example, one large transportation company faced with large-scale retirements in its information technology (IT) department, after extensive analysis, decided that buying a new IT system would be more cost-effective and decided to give retirement options to employees running the current system (Mitchell 2006). The organizational vulnerabilities faced by companies with an aging workforce are many. Current and impending labor shortages, insufficient succession planning, a thin leadership pipeline, long-term customer and

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supplier relationships, turnover costs, employee engagement, and the cost of lost knowledge are some of the many challenges that can lead a company to focus on and adapt to older workers. Each firm will address only those issues that are business-critical to that enterprise, and these challenges vary from company to company and industry to industry.

CONCLUSION Employers have responded to an aging workforce in with many innovative practices. Those that understand their boomer retirement risk have taken three different approaches in response. One focuses directly on programs aimed at the boomer/mature worker cohort, such as the recruitment program at CVS Caremark. A second approach strives to adapt organizational practices in ways that are age-neutral, as is the case at Deere. Still others, such as GSK, forgo either approach to focus on the distinct needs of each of the multiple generations they employ and on their interrelationships. Countrywide, the aging workforce is still only an emerging issue for most businesses, which do not as yet ‘‘feel any pain.’’ The most successful employer practices and programs aimed at boomers originate from an understanding of a firm’s own mature workers. Young (2007, 7) cautions, ‘‘Employers shouldn’t make assumptions about mature workers, but should seek information about their needs, motivations, career interests and plans.’’ This is wise advice as we enter a period when the employer–employee contract suggests ‘‘one size no longer fits all.’’ Employer adaptations to the needs of baby boomers have not as yet reached the stage where they can be called ‘‘best practices.’’ The term best practices refers to those practices that are recognized as excellent across a wide range of functions, industries, and/or processes. Best practice data is used to measure organizations against their competitors or to identify innovations to address a specific organizational challenge. ‘‘Promising practices’’ is more accurate terminology given the early stage workforce adaptations for mature workers’’ The traditional retirement paradigm is clearly undergoing change. Today’s terminology fails to accurately specify this changing reality. The demographic and labor force trends are nevertheless clear. Before long, we will move from calling the aging workforce an emerging issue to identifying it as a key business issue. Current ‘‘promising practices’’ will meet higher standards and become ‘‘best practices.’’ Most importantly, midcareer and older workers of the baby-boom generation will be viewed more often as human capital assets worthy of investment to optimize business performance. Many of the lessons and innovations from the private sector may eventually be valuable for and adapted to the nonprofit sector and the federal government, where mature workforce issues also loom.

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REFERENCES AARP. 2003. Staying ahead of the curve, 2003: The AARP Working in Retirement Study. Washington, DC: AARP. Burke, M. 2004. Generational differences. Survey Report, August. Alexandria, VA: Society for Human Resource Management. Byrd, A. 2006. Attention to a generation of leadership and experience. Presentation to the Tenth Annual Association of Work Life Professionals Conference, Austin, TX, February. DeLong, D. 2004. Lost knowledge—confronting the threat of an aging workforce. New York: Oxford University Press. Ernst & Young Human Capital Institute. 2006. The aging of the U.S. workforce: Employer challenges and responses. New York: Ernst & Young. Gardner, M. 2007. ‘‘Age friendly’’ workplaces on the rise. Christian Science Monitor. May 7. Available at http://www.csmonitor.com/2007/0507/p13s02wmgn.html. James, J. B., J. E. Swanberg, and S. P. McKechnie. 2007. Responsive workplaces for older workers: Job Quality, flexibility and employee engagement. Issue Brief No. 11. Chestnut Hill, MA: Center on Aging and Work at Boston College. Manpower. 2007. The new agenda for an older workforce. White Paper GC-13. Milwaukee, WI: Manpower. Mitchell, C. 2006. Age and opportunity: Plan strategically to get the most out of a maturing workforce. Executive Action Series No. 187. New York: Conference Board. Morton, L., L. Foster, and J. Sedlar. 2005. Managing the mature workforce. New York: Conference Board. National Institute on Aging. 2006. Dramatic changes in U.S. aging highlighted in new census, NIH report. Press release, March 17. Available at http://www. nia.nih.gov/NewsAndEvents/PressReleases/PR2006030965PlusReport.htm. Parkinson, D. 2002. Voices of experience: Mature workers in the future workforce. Research Report No. 1319. New York: Conference Board. Piktialis, D. 2007. Adaptations to an aging workforce: Innovative responses by the private sector. Generations 31 (1): 76–82. Piktialis, D., and H. Morgan. 2002. The aging U.S. workforce: Implications for employers. Benefits and Compensation Solutions, Winter: 38–42. Pitt-Catsouphes, M., K. Kane, M. Smyer, and S. Ce. 2007. The national study of business strategy and workforce development. Chestnut Hill, MA: Center on Aging and Work. Randstad. 2006. Older workers unappreciated in the workplace. Http://www.us. randstad.com/about/oldworkers_PR.pdf. Rappaport, A., and M. Young. 2007. Phased retirement after the Pension Protection Act. Research Report R-1402-07-RR. New York: Conference Board. Ruane, L. 2007. Snowbirds find work. Gannett News Service, February 11. Available at http://www.saukvalley.com/articles/2007/02/17/features/lifestyles/ 290867126020229.txt. Weinstein, D., and D. Kaufman. 2007. Putting experience to work: A guide to navigating legal and management issues relating to a mature workforce. New York: Conference Board.

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WorldatWork. 2007. The real talent debate: Will aging boomers deplete the workforce? Phoenix: WorldatWork. Available at http://www.worldatwork.org/waw/ adimLink?id=20508. Young, M. 2004. Holding on: How the mass exodus of retiring baby boomers could deplete the workforce and how employers can stem the tide. Presentation to Managing Mature Workers Research Working Group. New York: Conference Board. ———. 2007. Gray skies, silver linings: How companies are forecasting, managing and recruiting for a mature workforce. Research Report R-1409-07-RR. New York: Conference Board.

3

Entrepreneurship Strategies in Later Life EDWARD G. ROGOFF

T

here is a story of a 52-year-old traveling salesman who fell in love with a business owned by one of his customers and decided to end his thirty-year career in sales, buy the business, and become an entrepreneur. His family and friends told him the idea was foolish, banks by the dozen turned down his applications for loans, and he couldn’t even get a meeting with anyone on Wall Street. But he didn’t give up. He believed that his experience had taught him to recognize the potential of this business, identify and hire capable people, and work productively. Achieving the success he hoped for took about ten years. Changing the world took about another ten. The traveling salesman was Ray Kroc, and the company is McDonald’s. Kroc went on to achieve uncommon success, but his story is in many respects typical of the issues and challenges that later-life entrepreneurs face. Kroc had built up tremendous industry knowledge and insight in his years working for others. When he found the idea and concept that motivated him, years of frustration were transformed into huge reservoirs of energy and dedication. His ideas met resistance and even ridicule, but ultimately he created one of the most successful and enduring businesses in the world. Later-life entrepreneurs start from many paths. Some older workers find the world of traditional employment less welcoming than they had hoped, and for many, entrepreneurship becomes the only way to achieve their financial goals. Others harbor dreams for entrepreneurial adventures that can take

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flight when their traditional employment ends. Still others find retirement lacking in stimulation and develop full-time or part-time ventures as part of creating a desired balance in their lives. Becoming an entrepreneur was difficult for Ray Kroc, but ultimately hugely rewarding. Working for a large organization earlier in his career had provided structure, identity, and interaction with a group of colleagues. Building his own business had the benefits of leading to a sense of accomplishment and achievement and, of course, creating great personal wealth. Kroc was ultimately a winner at a game that most people lose. Most business ventures for entrepreneurs of any age fail, sometimes leading hopeful entrepreneurs to financial problems and subsequent careers that are far below their capabilities and ambitions—or to second and third tries at various ventures until they achieve success. The evidence is clear that entrepreneurship among older Americans is a major and growing phenomenon. There are several ways to examine this trend, and depending on the methodology followed, the information developed and statistical descriptions can seem quite different. In large part, this is because the nomenclature used in the U.S. Census is confusing and not does reflect the reality of self-employment and business ownership. Respondents must choose only one from a list of three employment options: being selfemployed in an incorporated business, being self-employed in a nonincorporated entity, or working without pay in a family business or farm. People who report that they are self-employed in incorporated entities are, by the government’s definition, employees of the corporation and thus not self-employed. That people can be self-employed in various legal entities aside from corporate forms such as partnerships, or in no entity at all, may not be clear to observers. Further, a fireman could have a carpentry business during his days off and help his father-in-law in a store during the holiday seasonqualifying under three of the census categories, while being limited to choosing only one. And most relatives can and do earn money while working in a family-owned business. EVIDENCE OF LATER LIFE ENTREPRENEURSHIP Workforce Studies While there are numerous studies of the U.S. workforce, few have collected information about entrepreneurship among older workers. Among those that have is the National Study of the Changing Workforce, which surveyed workers of various types, most recently in 2002. This is a large sample that provides an in-depth look at employment issues among the working population. The study clearly shows a strong association between age and entrepreneurship. Table 3-1 shows that while 8 percent of workers aged 50–59 are small business owners, 12 percent of workers over 60 years of age own their own businesses. Similarly, 13 percent of workers 50–59 years old and

Entrepreneurship Strategies in Later Life

TABLE 3-1.

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Employment Status by Age

Age

Wage and Salaried Employees

18–29 30–39 40–49 50–59 60+

84% 82 81 79 63

Self-Employed Independents 14% 12 13 13 26

Small Business Owners 2% 6 6 8 12

Source: Adapted from Bond et al. 2005, figure 1.

26 percent of workers over 60 are classified as self-employed independent workers. Because this sample only includes those who are still in the workforce, it may actually miss some entrepreneurs whose involvement may be mostly financial and who don’t put enough time into their ventures or earn a salary to be included in this study. Family Business Studies The 1997 and 2000 National Family Business Surveys used a household sampling frame. The researchers defined a family business as any business owned by one or more members of the household in which a family member worked more than six hours per week. The strong connection between family and business is well established (Heck and Scannell 1997; Heck and Trent 1999; Heck, Winter, and Stafford 1992). Many businesses rely on either human or financial family resources as key inputs. Entrepreneurs may initiate their ventures specifically because they want to accomplish family goals, such as helping their children get started in a business or having more flexible time to spend with their families. These studies have shown that about one household in seven runs a business under this definition—a rate that stayed constant regardless of the age of the family members. Census Data Using U.S. Census data to gain insight into the general trends regarding later-life entrepreneurship is problematic because of the crude way in which the census questionnaire asks about self-employment. As discussed above, the census definitions are inadequate representations of reality. Nonetheless, the data in table 3-2 clearly show that self-employment (for those in unincorporated entities) increases with age. For the age group 55 to 64, the total self-employment rate is 17.8 percent, and for people over 65, the total selfemployment rate is 26.9 percent (Hipple 2004). All the studies clearly show that entrepreneurship and age are strongly correlated.

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TABLE 3-2. Self-Employment Rates as a Percentage of All Employed and Self-Employed Workers, 2003 Age Under 16 16–19 20–24 25–34 35–44 45–54 55–64 65+

Unincorporated Self-Employed

Incorporated Self-Employed

7.5% 1.5 2.0 5.3 7.8 8.7 11.7 19.1

3.6% 0.2 0.4 1.9 4.1 4.8 6.1 7.8

Total 11.1% 1.7 2.4 7.2 11.9 13.5 17.8 26.9

Source: Employment and Earnings, June 2003, Table 4, p. 205, in Hipple 2004.

ENTREPRENEURSHIP What Is Entrepreneurship? There is no single accepted definition of entrepreneurship. Some people see entrepreneurship as tied closely to aggressive, creative, and innovative business creation. Others define it as being identical to self-employment. Entrepreneurship can more accurately be seen as the process of wealth creation through participating in any parts of the process of establishing, operating, and investing in business ventures. This definition covers self-employment, including innovative as well as copycat businesses; makes no requirements as to hours spent in the business, percentage of ownership, or legal structure; and makes no assumptions about the size of the financial ambitions of the entrepreneur. This last, broad definition is the best one because of the multitude of strategies that later-life entrepreneurs employ to achieve their goals through business participation. Why Do People Become Entrepreneurs? People become entrepreneurs because they either have to or want to. The first group comprises workers who are unable to obtain traditional employment because of economic conditions that limit their opportunities. The second group is made up of people with interests and dreams they want to pursue or lifestyle issues such as wanting to be their own bosses that make entrepreneurship attractive. Data collected for the National Minority Business Owners Survey (Puryear et al. 2003) shows that, among the white sample, 55-and-older entrepreneurs are more motivated to the opportunity to utilize their skills and abilities, make a contribution to society, and achieve work satisfaction than their younger counterparts.

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‘‘Have-To’’ Entrepreneurs The overall motivations for the ‘‘have-to’’ entrepreneurs are: 1. Economic conditions. A weak overall economy or an economy that is weak even in one sector may drastically limit employment opportunities. A pilot laid off from an airline may have trouble replacing his or her job if the airline industry is suffering a general slowdown. One option is for the pilot to begin an entrepreneurial venture within the airline industry, such as starting an air taxi service, or to enter another industry entirely, such as opening a flower shop. 2. Discrimination. Discrimination, sometimes in the academic literature called the ‘‘theory of the disadvantaged worker,’’ holds that individuals who face discrimination often turn to entrepreneurship. Light and Rosenstein (1995), Min (1984), and Evans and Leighton (1987) provide evidence of this relationship. Consider the example of an immigrant who may have been an executive in a bank in Russia but finds himself offered only entry-level positions at banks in the United States. One response to this lack of adequate employment opportunity—and in fact many immigrants follow this pattern—is for him to use his education and experience as tools in beginning or even purchasing a business. 3. Lack of resources. It is perhaps ironic that a lack of personal resources such as education, money, credit, or a business network may actually represent a starting point for many entrepreneurs. The academic literature refers to the overall issue as the ‘‘theory of liquidity constraint’’ and posits that individuals with a lower stock of such personal resources are generally constrained in their employment and entrepreneurial options. Among researchers who have explored this issue are Evans and Jovanovic (1989) and Brush (1992). Others who have found evidence of this effect include Light and Rosenstein (1995) and Evans and Leighton (1987). Bates (1990) studied the impact that increased levels of education had on performance of entrepreneurial ventures and concluded that increased education correlates positively with increased survival rates of these ventures. Consider an individual whose personal resources are minimal—low education, poor English skills, and no financial assets. While this person may begin to generate income by service work such as gardening, housecleaning, or dog walking, it is often a small step to obtaining additional clients and hiring additional employees to expand the business.

‘‘Want-To’’ Entrepreneurs Looking at those who fall into the ‘‘want-to’’ group of entrepreneurs, we can see the main reasons they are attracted to entrepreneurship: 1. Following the dream. Many people harbor dreams of being involved in work that is removed from their main careers. This might include being a musician or a stamp collector, owning a bed and breakfast, or starting a nonprofit venture.

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2. Managing family and time constraints. For some entrepreneurs, the constraints of time imposed by family responsibilities limit their ability to undertake a venture or accept full-time employment. Many entrepreneurial ventures, however, can be part-time and even home-based, leaving time for family responsibilities such as child or elder care. 3. Having a limited role. Many entrepreneurs structure their ventures so they have limited involvement in the business in terms of time requirements, management, and even financial risk. By casting themselves in the role of dealmakers, they recruit others to participate in their ventures, with minimal personal risk and commitment themselves. For example, one might obtain financing from other sources to purchase and then operate from a distance a business that already has management in place. An extension of this would be ‘‘angel investing,’’ in which one invests in a business and takes an active but limited role in its management. 4. Having flexibility over time. A venture can be designed so that the involvement of the entrepreneur can vary over time. It can start as a part-time commitment, but with the option to become full-time when a person retires from a job or is relieved of time-consuming family responsibilities. 5. Building equity value. Unlike regular employment, entrepreneurial ventures can create business value that benefits the owner. If successful, a business can be sold when she wants to fully retire, potentially creating a significant lump-sum return. 6. Being the boss. Being one’s own boss is among the most highly valued characteristics of entrepreneurship, especially for later-life entrepreneurs. After long careers during which they have developed clear ideas of how businesses should be run, perhaps working for bosses whose management decisions and styles may have been frustrating and negative, the ability to make all the decisions becomes very attractive to many aspiring entrepreneurs. 7. Accomplishing a social good. Research has shown that one of the most attractive aspects of entrepreneurship for some is the ability to accomplish a desired political or social purpose (Lee and Rogoff 1996). This seems to be especially true for members of certain minority groups who view entrepreneurship as reflecting well on their ethnic group and creating employment and other economic benefits to their communities (Lee and Rogoff 2006). This goal can be achieved by having a business that has both economic and social purposes, such as a school or health care business, or by starting a nonprofit organization to provide social services to members of a specific community.

How Age Supports Entrepreneurship Older populations bring with them several key elements that both encourage entrepreneurship and support the success of their ventures, including: • Education and experience. Research has shown that education and experience increase the probability of being an entrepreneur and the likelihood of

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building a successful venture. Of course, it makes sense that older populations have more of both (Light and Rosenstein 1995). • Financial capabilities. Starting or buying a business usually requires capital, and older populations are wealthier and have better credit histories, which is critical in obtaining financing from banks and other sources. This point is made clear by the following facts: While the median net worth for U.S. households according to the 2000 U.S. Census is $46,506, it is $150,824 for households headed by individuals between 55 and 64 and $170,300 for households headed by individuals over 65. • Strong networks. Researchers such as Aldrich and Cliff (2003), Larson (1991), and Dubini and Aldrich (1991) have shown that, while it possible to fly solo, almost no ventures are started entirely on one’s own. Entrepreneurship is a team sport, and entrepreneurs need lawyers, accountants, partners, investors, bankers, suppliers, and most importantly customers. Later-life entrepreneurs are more likely than younger people to have these essential contacts and are able to deploy them in the pursuit of their venture.

INCREASING OPPORTUNITIES FOR LATER-LIFE ENTREPRENEURS The opportunities for aspiring entrepreneurs are growing. Consider the following: Entrepreneurship has lost the stigma it once had. There was a time when employment and a long career with a large, prestigious company were seen as the most desirable professional path. Today, large companies don’t provide the security they once did, and the large-company sector of the economy is no longer the primary engine of job creation. Business schools that once focused on preparing students for careers in major corporations have seen significant growth in the programs they offer to train entrepreneurs. All of this has combined to make later-life entrepreneurship more attractive, better understood, and highly acceptable as a career step. Technology has made business ownership more accessible. Until recently, the first steps in opening a new business were generally seen as renting an office and hiring a staff. Working from home was regarded as unacceptable, and being a solo flyer was seen as a choice only hermits would make. Computers, cell phones, telephone answering systems, word-processing software, and the Internet have made small business start-up and operation easier and cheaper. The Internet has leveled the playing field for small business. Websites make it easier for small businesses to seem big, potentially servicing customers anywhere in the world. Companies such as eBay and Amazon.com that provide the structure for individuals and small businesses to reach their markets have significantly lowered the barriers to small business operation than existed previously. With eBay having more than 78 million users that it classified as active in 2006 (eBay 2006), there are clearly millions of people

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who earn regular incomes as entrepreneurs buying and selling products through eBay. Knowledge-based businesses are growing. Later-life entrepreneurs have skills, experience, and education that represent valuable commodities. Outsourcing, once considered a bad word, is now recognized as an efficient way to do business, and later-life entrepreneurs are well-positioned to excel in this work. Franchise businesses are a growing opportunity. Franchises represent a ‘‘business in a box’’ to people who want to purchase a concept, operating plan, and brand name. In the United States alone, there are more than a thousand businesses that franchise and more than 750,000 franchises in operation (International Franchise Association 2005, 1). Given the greater level of wealth and access to capital that later-life entrepreneurs have, they are a good match for franchise businesses. STRATEGIC OPTIONS FOR LATER-LIFE ENTREPRENEURS The flexibility of entrepreneurship in later life is one of its most compelling features. The substantial personal and financial resources that later-life entrepreneurs can call upon open up many options. Here are some of the major strategies that later-life entrepreneurs can use: • Start a business. An entrepreneur may have an idea for a new restaurant or an online quilt-making supplies website. Using experience, savings, and industry connections can allow a later-life entrepreneur to initiate such a business from scratch. • Buy a business. Like Ray Kroc, a later-life entrepreneur can utilize his or her resources in order to skip the start-up phase by purchasing an existing business, which the entrepreneur will then maintain or hope to expand. • Raise capital from others. Obtaining the financial resources required to become an entrepreneur is one of the highest hurdles for most entrepreneurs to clear. But later-life entrepreneurs are likely to have larger, wealthier networks as well as strong reputations to aid in raising capital from others that can be deployed in the furtherance of any strategy. • Work as a consultant. One-person shops are a common and exceedingly available strategy for people who have built significant expertise along with large lists of industry contacts. This strategy usually requires little capital investment, and the process of obtaining clients follows from reaching out to familiar industry contacts. • Purchase a franchise. Franchises are predeveloped formula businesses, from auto body shops to home health care services. They require an upfront financial investment in exchange for reduced upfront development time. Because day-to-day operations can be delegated to partners or employees, many later-life entrepreneurs find this approach attractive. • Join a direct marketing organization. Perhaps not seen by some as an entrepreneurial venture, direct marketing organizations such as Avon, Mary Kay,

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or the Pampered Chef are, in essence, small and flexible entrepreneurial endeavors. Like a franchise, the entrepreneur makes an alliance with a company that has products, a strong brand name, and a operations manual. The entrepreneur can then work full-time or part-time on a flexible basis. Except for those who recruit many others into the company, the benefits tend to be modest and usually represent a sideline that supplements other family income. • Partner with others such as family members. Entrepreneurship is often a team sport, and later-life entrepreneurs can bring a great deal to the team by way of expertise, financing, and access to a broad network. Partnering with others who may be willing to work long hours with intense dedication allows the later-life entrepreneur to participate in a venture that matches well with their lifestyle preferences. • Invest in an existing firm. Often called ‘‘angels,’’ later-life entrepreneurs with industry expertise and financial resources to invest in a firm often become a primary source of financing for relatively young, growing businesses. Being such an angel investor allows the later-life entrepreneur to obtain financial returns, serve in a key role, and have a flexible time commitment. • Focus on social goals. Social entrepreneurs see ventures as means to achieve socially desirable ends, such as curing a disease or helping a group in need, usually in the form of a nonprofit structure. A common type of social venture today is ‘‘green’’ or environmentally friendly businesses that operate on a profit-making basis. Social entrepreneurs operate in a sphere that includes philanthropists and volunteers, taking primary responsibility for building an organization.

CONCLUSION: LATER-LIFE ENTREPRENEURS HAVE MEANS, MOTIVE, AND OPPORTUNITY Entrepreneurship is a backbone of capitalism, creating new jobs, commercializing new technologies, and building the big businesses of the future. It is clear that later-life entrepreneurs have the means, motive, and opportunity to participate in and benefit from this trend. The means include the funds necessary to start a venture or purchase one, the credit to borrow money, and the network of friends and family to support an entrepreneurial venture financially. Means also includes the knowledge gleaned from formal education, work and life experience, and skills that are critical in supporting a successful venture. The motives for later-life entrepreneurs include the need to continue to earn income even after traditional retirement, the desire to be mentally engaged in work, and the hope to follow long-held dreams. As all evidence points to longer and healthier lives, shrinking pensions, and continued personal ambitions, later-life entrepreneurship becomes a more attractive option for older people. Opportunity exists in a multitude of ways for all Americans, but more so for later-life entrepreneurs. The personal and professional networks they

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have built through their lives form the basis of contacts that can lead to clients and customers. The ease of buying an existing company, purchasing a franchise, or starting a business are hallmarks of an American economy that has low barriers to entry for newcomers. All of these combine to explain why later-life entrepreneurship is a significant fact of economic life for older Americans and will continue to grow. REFERENCES Aldrich, H. E., and J. E. Cliff. 2003. The pervasive effects of family on entrepreneurship: Toward a family embeddedness perspective. Journal of Business Venturing 18 (5): 573–77. Bates, T. 1990. Entrepreneur human capital inputs and small business longevity. Review of Economics and Statistics 72 (3): 551–59. Bond, J. T., E. M. Galinsky, M. Pitt-Catsouphes, and M. A. Smyer. 2005. Context matters: Insights about older workers from the National Study of the Changing Workforce. Research Highlights No. 1. Chestnut Hill, MA: Center on Aging and Work. Brush, C. G. 1992. Research on women: Past trends, a new perspective and future directions. Entrepreneurship Theory and Practice 16 (4): 5–30. Dubini, P., and H. Aldrich. 1991. Personal and extended networks are central to the entrepreneurial process. Journal of Business Venturing 6:305–13. eBay. 2006. Press release, July 19 [2nd quarter company financial results]. San Jose, CA: eBay. Evans, D. S., and B. Jovanovic. 1989. An estimated model of entrepreneurial choice under liquidity constraints. Journal of Political Economy 97 (4): 808–27. Evans, D. S., and L. S. Leighton. 1987. Self-employment selection and earnings over the life cycle. Washington, DC: GPO. Heck, R. K. Z., and E. Scannell. 1997. Defining and counting family businesses: Results from a national pilot study. Proceedings of the 1997 Annual Conference of the International Family Business Program Association, Amherst, MA, July 10–12. Heck, R. K. Z., and S. E. Trent. 1999. The prevalence of family business from a household sample. Family Business Review 12 (3): 209–24. Heck, R. K. Z., M. Winter, and K. Stafford. 1992. Managing work and family in home-based employment. Journal of Family and Economic Issues 13 (2): 187–212. Hipple, S. 2004. Self-employment in the United States: An update. Monthly Labor Review 127 (7): 13–23. Available at http://www.bls.gov/opub/mlr/2004/07/ art2full.pdf. International Franchise Association. 2005. Foundation report. Washington, DC: International Franchise Association. Larson, A. 1991. Partner networks: Leveraging external ties to improve entrepreneurial performance. Journal of Business Venturing 6:173–88. Lee, M.-S., and E. Rogoff. 1996. Comparison of small businesses with family participation versus small businesses without family participation: An investigation of differences in goals, attitudes, and family/business conflict. Family Business Review 9 (4): 423–37.

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Light, I., and C. Rosenstein. 1995. Race, ethnicity and entrepreneurship in urban America. New York: Aldine de Gruyter. Min, P. G. 1984. From white-collar occupations to small business: Korean immigrants’ occupational adjustment. Sociological Quarterly 25:333–52. Puryear, A. N., E. G. Rogoff, M.-S. Lee, and R. K. Z. Heck. 2003. National Minority Business Owners Surveys, Whites and Blacks, 2003. Unpublished data. Lawrence N. Field Center for Entrepreneurship, Baruch College, New York.

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Planning for the Boomers’ Future: The Emergence of Financial Gerontology NEAL E. CUTLER

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inancial gerontology is the emerging subfield of gerontology research and teaching that provides applied gerontology education to financial professionals (Cutler, Gregg, and Lawton 1992). It is especially important to note that while the primary audience for financial gerontology education is financial, the teachers and the content come primarily from gerontology. Or, as the first training institute in the field summarizes the situation, ‘‘We are Financial Gerontology. We don’t teach finance; we teach gerontology’’ (Cutler 2008b). When this emerging subfield ‘‘officially’’ began, the oldest boomer was barely middle-aged (in 1990, when she was age 44) (Gregg 1990; Cutler 1990). And while the many and complex relationships among age, aging, money, and finance are inherently the focus for teaching and research, there is little doubt that the inevitable demographic, social, and financial march of 76 million boomers (they’re not babies any more) into and through middle age has accelerated the importance of the field—both in finance and in gerontology. As one of the chapters in this volume’s discussion of ‘‘The Financial World of the Boomers,’’ it is clear that this emerging discipline is but a piece of a larger story. Individually and collectively, boomers are consumers, workers, savers, investors, planners, and retirees. And, further, not to be left out of the story, boomers also are the middle-age ‘‘kids’’ of elderly parents while simultaneously being on the cusp of wearing the mantle of older age themselves.

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Our story has four parts: • A more or less concise definition of financial gerontology, alongside a bird’s-eye view of an almost two-decade history of teaching and research. • An overview of the ‘‘five kinds of aging’’ used in teaching financial gerontology. As we quickly tell the students, it’s not really different ‘‘kinds’’ of aging but different lenses through which aging should be viewed to best understand the connections among age, aging, business, and finance. The first two lenses are population aging and individual aging. • A slightly more detailed consideration of the other three kinds of aging: middle aging, generational aging, and family aging. • Finally, a ‘‘what’s next?’’ assessment.

WHAT IS FINANCIAL GERONTOLOGY AND HOW DID IT COME ABOUT? There are two ‘‘levels’’ of definition relevant to this discussion. The first is the more academic definition that focuses on financial gerontology from the vantage point of the scholar and the teacher. The second definition is more useful in introducing financial gerontology as an applied field of education and training to students, including especially financial professionals for whom application is more critical than evolutionary conceptual frameworks. In a paper titled ‘‘Financial Gerontology as Transdisciplinary Pedagogy,’’ Financial Gerontology is defined as follows: ‘‘Financial Gerontology is the subfield of academic gerontology that provides applied gerontology education to qualified professional financial advisors. This is transdisciplinary in that we want our students to conceptualize and think gerontologically—in this sense to become transformed’’ (Cutler 2008a). The key elements of this definition are that the field is essentially academic in origins, given that the concepts, data, and pedagogy are rooted in academic teaching and research. At the same time, however, the focus and the origin of the instruction are targeted to financial professionals. Further, the definition emphasizes that what is essentially taught to these financial professionals is gerontology and not finance. This important aspect is emphasized by the definitional term qualified—meaning that the gerontology content is crafted for professionals who are already educated or experienced in financial matters. Thus the mantra mentioned at the beginning of this article: ‘‘We are Financial Gerontology. We teach gerontology; we don’t teach finance.’’ Further, the definition emphasizes that this emerging subfield is not ‘‘simply’’ interdisciplinary or multidisciplinary. Rather it is intended to be transdisciplinary, in that the students—who are educated and experienced members of the financial field—become ‘‘transformed’’ so that in their practices they begin to think about problems and solutions from a gerontological perspective. This gerontological perspective, in turn, includes the five kinds

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of aging mentioned earlier. Whether or not professional financial planners, advisors, and consultants actually do become transformed in their thinking and advising remains to be seen. The definition of financial gerontology offered in class to students, however, is less conceptual and more direct. In the classroom, we start by focusing on the two words separately. First, gerontology: Every course begins with the explanation that gerontology is not the study of old people. It is, rather, the study of the processes of aging—the multiple processes of aging. In fact, we focus on five kinds of aging. Or, as hinted earlier, not really ‘‘kinds’’ of aging, but rather five lenses through which we examine the multiple linkages among aging and finance: • • • • •

Population aging Individual aging Middle aging Generational aging Family aging

The financial part of the definition of financial gerontology refers to the audience to whom the applied gerontology education and training is directed. The primary focus of the work is to provide targeted gerontology education to financial professionals. Although financial planning has always looked ahead to retirement, pensions, health care finance, and related ‘‘old age’’ issues, it has become clear to educators and practitioners for several reasons that a broader perspective to later-life financial planning is needed. Since gerontology is not the study of old people, especially given the middle-aging of 76 million boomers, successful professional financial advising requires a large serving of applied, targeted gerontology: financial gerontology. The field or subfield of financial gerontology started with the vision of two men, one a high school football player from West Philadelphia who became the millionaire owner of an insurance company, and the other, a Texas gentleman with a doctorate from the University of Pennsylvania. Born in 1902, Joseph Boettner’s only education beyond high school was when he attended night school classes to earn his Chartered Life Underwriter (CLU) life insurance designation in the 1930s from the American College of Life Underwriters, then located on the campus of the University of Pennsylvania. Over the years, he succeeded as an insurance salesman, and then a manager and executive in life insurance companies, and he eventually became president of a midsize insurance company. And over these years, he retained his affection for the institution that gave him his start in the life insurance business. Fifteen years his junior, Davis Gregg attended the University of Texas, earned his doctorate in insurance and finance from Penn’s Wharton School of Commerce and Finance (now known simply as the Wharton School). He was an assistant professor at Stanford University before becoming dean of

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the faculty, and then vice president and president of the American College of Life Underwriters. Over forty years, from dean to college president and from salesman to company president, the Texas gentleman and the Philadelphia athlete established strong and enduring personal bonds, publicly referring to each other as brothers, not friends. In his middle and older years, Boettner funded university scholarships and endowed professorships in risk, finance, and life insurance, largely in the Philadelphia area. Around 1985, as Boettner was in his mid-80s and the younger Gregg had become president emeritus, they saw the critical salience of the aging dimensions of what Gregg (1992) referred to as ‘‘financial science.’’ Together they decided that the insurance and financial consultant training programs of the renamed American College—now located in almost-rural Bryn Mawr, fifteen miles west of Philadelphia—should include an understanding of the multiple social science concepts and issues that connect finance with aging. Together they organized the Boettner Research Institute, whose purpose would be to bring the academic study of aging into the financial curriculum offered to life insurance agents (CLU) and chartered financial consultants (ChFC). They hired Neal E. Cutler, who at the time was professor of political science and gerontology at the University of Southern California (USC). I had developed the Andrus Gerontology Center’s research program in social policy and what I called ‘‘political gerontology’’ (Cutler 1977). At this stage, the institute had only a generic name (Boettner Research Institute), and a first task was to find a ‘‘content’’ name that would aptly describe its mission. ‘‘Economics of Aging’’ was too broad, and ‘‘Institute on Work and Retirement’’ was both too narrow and already the title of other academic centers. I suggested that since gerontology (the noun) was well established as an academic field (including journals, courses, textbooks, national associations, and the well-recognized USC Andrus Gerontology Center), why not adapt Gregg’s use of the phrase ‘‘financial science’’ and simply put the adjective financial in front of gerontology. After two years at the American College, Boettner and Gregg arranged for the Boettner Institute of Financial Gerontology to move to the University of Pennsylvania. Financial gerontology was conceived of as social gerontology whose teachings would be offered to financial professionals. Thus, the research program of this new subfield became associated first with the Population Demography program at Penn and later the School of Social Work. As mentioned, Boettner spent much of his fortune sponsoring and funding university education. Before his death, he arranged to endow a chair at Widener University in Chester, Pennsylvania, where he was a lifetime member of the Board of Trustees. Through this endowment, he wanted to honor and memorialize his ‘‘younger brother’’ Gregg, who had just died after a brief illness. Thus, the Boettner/Gregg Chair in Financial Gerontology, a first of its kind, was endowed at Widener, to be held by Cutler, who had directed the Boettner Center at both the American College and the University of Pennsylvania.

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POPULATION AGING AND INDIVIDUAL AGING In teaching gerontology to financial professionals (and to others), it is essential to emphasize the point that gerontology is not simply the study of old people. It is in this context that we talk about the five kinds of aging, by which we mean five lenses through which we examine the processes of aging: population aging, individual aging, middle aging, generational aging, and family aging. Although we are fundamentally looking at the same people, the goal is to encourage financial professionals to more comprehensively understand the complexity of age, aging, and the multiple processes of aging. The first two of these are reasonably well known, or at least recognized by most professionals, and will be mentioned only in passing here. The other three kinds of aging, however, typically offer unique perspectives to financial professionals that add to the tools and techniques of their practice—they will be discussed in the next section. Population aging refers to macrosocietal (and by extension, macroeconomic) profiles of aging, usually at the national level of analysis. Typically we look at patterns in the number or percentage of ‘‘old’’ persons over time, but these days we also want to examine comparable patterns of middle-age populations. The United States (as are many economically developed countries) is ‘‘getting older.’’ This ‘‘graying of America’’ and ‘‘graying of the budget’’ (Hudson 1978) is typically seen as the consequence of population aging: more old people (measured in both numbers and percentages, and ratios of old to young) than in previous years. The ‘‘cause’’ of the increasing number of older (first middle-aged and then old) Americans is no mystery: the 76 million baby boomers born between 1946 and 1964 (who turned 44 to 62 years old in 2008) are now moving into middle age, with older age just around the corner. The national crises or challenges (depending upon one’s politics) in Social Security and Medicare are largely portrayed as the consequence of population aging. Population aging, however, includes more than the simple count of persons. Trends over time and the compositional impact of different functional definitions of ‘‘old’’ (retirement, health, dependency) are critical parts of the story. Further, the attributes of different age groups—gender, education, and of course income and wealth—are substantial components of population aging. To be sure, financial advisors are usually and appropriately more focused on how the dynamics of individual aging affect their individual clients. But for an evidence-based and empathic understanding of the gerontological dimensions of financial practice, population aging provides the first stop. Individual aging refers to the individual-level processes of maturation and human development—in other words, the ‘‘everyday’’ use of the word aging. There is no single or correct answer to the oft-asked question ‘‘When does aging begin?’’ Our biology faculty colleagues typically note that aging begins at the moment of conception—a conversation most financial gerontologists (and

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political gerontologists) prefer to avoid. Interestingly, most of the popular definitions of ‘‘old age’’ are financial in character, and collectively they demonstrate the variability (some advisors might say ‘‘chaos’’) in definitions of older. For example, age 591=2 is the age for withdrawals from most defined contribution accounts (avoiding a 10 percent early-withdrawal penalty). Age 60 defines eligibility for services under the federal Older Americans Act. Eligibility for reduced early Social Security retirement income benefits remains at age 62, even as the age for full benefits is rising. Age 65 has been the ‘‘traditional’’ definition of the beginning of ‘‘old age,’’ until recently the eligibility age for full Social Security benefits and still the age of Medicare eligibility. As a statistical indicator used in census and survey comparisons over time, age 65 is likely to remain our cultural marker of ‘‘old,’’ even as the Social Security full-benefits age rises to age 66 (in 2009) and age 67 (in 2027). Of special importance to advisors, this uncoupling of the ages for Social Security (65 to 67) and Medicare (65) eligibility becomes very important as the cost of health care continues to be an increasingly critical issue for individual and family retirement planning. A more fundamental dimension of individual aging is the continued expansion of old-age life expectancy in the United States. While life expectancy at birth has increased dramatically (from forty-eight years in 1900 to seventyseven years in 2000), increases in life expectancy at age 65 (from twelve years in 1900 to eighteen years in 2000) is more directly relevant to retirement planning. Beyond simply ‘‘adding years to life’’—as the saying goes—recent evidence suggests that we are also ‘‘adding life to years.’’ Research by Crimmins and her colleagues demonstrates that in recent decades the years added to life beyond age 65, when measured in terms of health-adjusted life expectancy (HALE), tend to be reasonably healthy years (Crimmins, Saito, and Ingeneri 1997). Figure 4-1 shows that within the total added years of life expectancy measured in 1970 to 1990 (indicated at the top of each vertical bar), most of the added years are years of comparatively little or no functional disability. One consequence of this good news is that retirement planning should consider financial plans for good health as well as for poor health. THREE OTHER KINDS OF AGING At first blush, the ideas in this section seem obvious. Of course, middle aging is recognized; a majority of financial advisors are probably middleaged themselves. And doesn’t everyone understand generational aging? Raised in the New Deal or saddened by the end of the New Frontier, isn’t this obvious? As to family aging, there’s little doubt that financial advisors recognize that financial decisions are family decisions. Yet recent research offers new data and perspectives that can illuminate and improve the relationships between financial advisors and their clients. None of this is to argue that these different kinds or views of aging are mutually exclusive. Generational differences and the individual aging of

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FIGURE 4-1. Life Expectancy at Age 65: Years of Health-Adjusted Life Expectancy [HALE]

boomers are closely intertwined with the dynamics of middle aging. Similarly, middle-agers are also the ‘‘generation in the middle’’ in many families—especially in families in which increasingly longevity means that the parents are in their 90s. The financial gerontology perspective is simply that each of these views of aging should be part of the applied gerontological education that will transform financial professionals’ understanding of and ability to work with their clients. Middle Aging The primary gerontological ‘‘lesson’’ about middle aging is that it is a relatively recent ‘‘social invention.’’ Several social and cultural changes identify the relative newness of the middle-age life stage (Schaie and Willis 2001; Cutler 2004), including: • • • •

Longevity Pensions Empty nest *Longevity of parents

Clearly these four characteristics are not mutually exclusive; each one helps to ‘‘create’’ the others. Collectively, however, these changes identify the importance of infusing the dynamics of middle aging into the financial advisory process.

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Because longevity continues to increase, as people live longer there is more opportunity for time ‘‘in the middle’’ for different kinds of life experiences. To be sure, there has always been a numerical middle even when life expectancy was only thirty-five years! The directly relevant point, however, is that as people increasingly live into their 90s and beyond, there is a larger number of years after work and before frailty for life and experience to evolve. And given the HALE findings documented in figure 4-1, middle age will be both longer and relatively healthier than in decades past. Pensions are a relatively recent twentieth-century social-financial invention, at least for the general public. Traditionally, pensions provide income after leaving the labor force. As influenced by the longevity piece of the puzzle, pensions provide a period of time subsequent to work and prior to frailty and death where the family can do (and can plan to do) something else. The longer the life expectancy, the more critical the pension resources become, and the more complex and interesting middle age becomes. The connection between increasing longevity and postwork income sufficiency (pension, savings, Social Security) then becomes a critical issue for financial advisors. The Wealth Span model in financial gerontology views the process as the interplay between two conceptual stages: accumulation and expenditure (Cutler 2002). Over the past century, the accumulation stage has become shortened: it starts later (after college or graduate school) and ends sooner (with patterns of early retirement, although now this seems to be changing [Copeland 2007]). At the same time, the expenditure stage is getting longer: it starts earlier (early retirement again) and lasts longer (due to increasing longevity). The result, with clear relevance to financial practice: Nowadays we have fewer years to accumulate and what we accumulate has to last for a greater number of years. The empty nest refers to the parental family in which the youngest child has left home—although we are all fully aware that financial and social responsibilities for the children do not go away! The empty nest is a relatively new experience, which, in turn, adds to the ‘‘invention’’ of middle age. In traditional society, if and when the youngest child left the nest, typically the parents were relatively near the end of their active lives. But thanks to increased longevity, there is now a longer period of years prior to frailty after junior goes off to college or a job, during which the parents can do something else. And, when linked to postwork pension income, these dynamics combine to identify middle age as a ‘‘different’’ stage in life—something different than simply a waiting period between work and death. The empty nest phenomenon (in concert with these other elements of the new middle age) also helps to define middle age in social-psychological terms. Research suggests that, for some families, the exit of the youngest child is a time of traumatic adjustment, loss of immediate responsibilities,

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and the feeling that a critical aspect of family life has been removed. For other families, it can be a time of liberation; parents get renewed privacy, more time to travel and to play, and a reason to change living location (Putney and Bengtson 2001). Whether crisis or liberation, and however these feelings are dealt with, an empty nest stimulates a time of reflection, taking stock as to what’s next, and helps to identify these middle years as a new stage of life—in which the transdisciplinary financial gerontologist can play a significant role. *Longevity of Parents. The final ‘‘cause’’ of contemporary middle age is different (hence, the asterisk) in that the preceding three factors are each an attribute of the middle-aged person. In contrast, longevity of parents is an attribute of someone else—in this case, parents. The documented improvements in life expectancy affect the parents as well as the middle-agers. Thus, the longer the parents are alive, the longer the middle-ager is the ‘‘generation in the middle.’’ To be sure, this is a slightly different meaning of the word middle: the middle of a relationship network as distinguished from middle of one’s own life span. Nonetheless, this relational ‘‘middleness’’ adds to the contemporary identity of social-psychological middle-agedness. Generational Aging The concept of generational aging argues that maturation, or individual aging, is only half of a pair of ‘‘alternative rival hypotheses’’ when it comes to understanding the age factor in patterns of social, political, and financial attitudes and behavior. Differences in financial attitudes (in 2008, for example) between a 70-year-old and a 30-something could be the result of forty years of individual maturational aging. At the same time, however, these two individuals experienced and were socialized in vastly different periods of economic history, being born in 1938 versus 1978. While this may seem obvious at first, in fact the tendency of most observers, journalists, practitioners, and even many researchers is to interpret the age distribution of an attitude or behavioral characteristic simply as the consequence of ‘‘aging,’’ that is, individual maturational aging. The situation is not so simple, of course, and it is important that financial professionals and academic researchers alike always consider the generational ‘‘alternative rival hypothesis.’’ The advisor sitting across the desk from an ‘‘old client,’’ seeing gray hair and wrinkles, may almost automatically or unconsciously categorize the client’s concerns in terms of elderly or ‘‘aging’’ (that is, maturation or individual aging). However, the advisor should always evaluate both the maturational interpretation and the generational interpretation of the client’s concerns. That is, an old client’s financial fears may reflect having become old, but the situation may well reflect generational experience and socialization instead. In applying cohort analysis to these kinds of issues, developmental psychologist K. Warner Schaie (1967)

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concludes that ‘‘age differences’’ do not always signal ‘‘aging changes.’’ Quite often age differences in social, political, and financial attitudes are the consequence of generational/cohort experience. To not consider the generational hypothesis (that is, to consider only the maturational/aging interpretation of age differences) can lead to dangerous financial consequences. Figure 4-2 offers the age pattern of average household expenditures in 2004, as presented by Bernicke in the Journal of Financial Planning (Bernicke 2005). The expenditure data and the age group labels are from the original article; the ‘‘year born’’ labels (indicating generation or birth cohort) in the middle column were added in my alternative interpretation of the data, published in the Journal of Financial Service Professionals (Cutler 2005). The original maturational interpretation of the expenditure data is that ‘‘as people age,’’ they spend less, and therefore financial planners who do not recognize this age-related decline are thereby advising their clients to ‘‘save too much’’ for retirement. The key to this ‘‘saving too much’’ view is to interpret the difference between the average $27,517 that 70-somethings spent in 2004 as a 40 percent decline from the $45,862 that 50-somethings spent. In turn, Bernicke argues that this decline reflects the trajectory of financial behavior of people ‘‘as they age’’—implying an individual-aging, maturational dynamic process. A lifetime career of studying the age-period-cohort conundrum (my earliest research on this focused on voting patterns, published almost forty years ago [Cutler 1969]) quickly suggests that this maturational aging-related interpretation of the cross-sectional 2004 expenditure data is not the whole story. But more critically, the ‘‘policy’’ admonition the author derived from not considering the alternative generational hypothesis (i.e., telling clients that they are saving too much for their retirement) will result in poor advice to many, if not most, clients.

FIGURE 4-2. Age and Spending: Maturation or Generation?

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My ‘‘methodology’’ of adding the middle ‘‘year born’’ column simply applies a new set of labels to the same expenditure data. With these new labels, however, a generational interpretation can be seen more clearly. The 1930–1934 birth cohort was born and raised in the Great Depression, and it is not surprising that its surviving members are frugal in their spending habits; it’s even likely that they have (in general) always had conservative spending habits. Similarly, it is not surprising that those early boomers (1945–1949) born and raised in the post–World War II economic boom years have previously spent and continue to spend more than the Depression cohort. After examining these and similar cross-sectional age data and tables, students are then typically asked: Well, which is it? Is it maturation or is it generation? Is it individual aging or historical influences? And, of course, the only reasonable answer is ‘‘Both!’’ Human behavior is much too complex to be ‘‘explained away’’ by single-cause explanations. And especially in the context of financial gerontology, because the ‘‘age variable’’ is saturated with texture and complexity, financial attitudes, worries, and behaviors are especially likely to reflect a mix of both individual aging (maturation) and generational aging (history, cohort). The data in Figure 4-2 show a 40 percent age difference. There is no evidence that this is a 40 percent individualaging process-related decline. Despite the lower average spending levels of today’s cohort of elderly, most of today’s middle-age clients are not saving too much for their retirement. Family Aging Family aging refers to the changing age structure of the family and is central to understanding contemporary patterns of money and retirement planning. The observation that ‘‘financial decisions are family decisions’’ is generally recognized, but it has increased salience in the context of financial gerontology (Cutler 2002, chap. 4). Among the five kinds of aging, family aging is the one least noticed. Individual aging (longevity) is often linked to patterns of frailty, retirement income, and Alzheimer’s disease. Population aging (‘‘so many old people’’) is often cited in media reports as the cause of the financial challenges faced by Social Security and Medicare. Generational aging, often seen in terms of a ‘‘generation gap,’’ has been prominent since the social policy politics of the 1960s. And boomers have elevated middle aging (‘‘60 is the new 40’’) to cultural icon status. Family aging is a product of these other dynamics. This changing nature of family aging is illustrated in figure 4-3, which is adapted from the work of Peter Uhlenberg (1996). Uhlenberg is a historical demographer who has reconstructed a variety of family patterns from historical census data. Figure 4-3 shows that in 1900, few (4 percent) 50-year-olds had both parents alive, and that this proportion rose to 27 percent by 1990. The picture was somewhat better for ‘‘at least one parent alive’’—39 percent in 1900, rising to 80

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percent by 1990. The historical demographic portrait of 60-year-olds in figure 4-3 has special importance for financial services and serves to introduce the concept of the ‘‘senior sandwich’’ generation. In 1900, only 7 percent of 60-year-olds had even one surviving parent, with only 13 percent in 1940, but rising to almost half by 1990 and no doubt continuing to rise as twenty-first-century older-age longevity continues to increase. From the perspective of financial gerontology, the story of these ‘‘60-year-old kids’’ takes on special significance (Eisenberg 2006, chap. 9). While on the cusp of their own older-age (residential, health, financial, social) planning, increasingly they are also likely to have surviving older parents. And, as one student noted in this regard, the mother of a 60-year-old is not likely to be 75. This would not be the cause for societal financial concern, except for the well-heralded fact that millions of boomers are now moving into and through their 60s. The traditional ‘‘sandwich generation’’ concept was identified over a quarter-century ago by sociologist Elaine Brody. It referred to women in their 40s who were pressured, sandwiched in the middle between the competing demands of young children and older parents (Brody 1981). Nowadays, however, for various family and demographic reasons, many middle-agers simultaneously are responsible in one way or another for both comparatively young children and elderly parents—and it’s not just women (Kaye and Applegate 1990). Consequently, from both gerontological and financial perspectives, we are concerned with the newer concept of the senior sandwich generation, roughly defined as persons age 55 to 70 who have a living parent and a child who is in college or younger. The responsibilities of the ‘‘sandwiched’’ middle-ager may or may not be immediately financial, but the middle-ager’s own retirement planning at least will have to take into account these seniorsandwich-generation concerns. From the perspective of gerontological demographics (population aging), the likelihood that a 60-year-old kid has a 90-year-old parent is not

FIGURE 4-3. Family Aging Middle-Age Boomers Increasingly Have Elderly Parents

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FIGURE 4-4. Delayed Marriage + Later Babies = Later-Life Children

especially surprising—given increasing old-age longevity (individual aging). What is perhaps more interesting is the presence of young children in these older middle-aged families. Professor Janice Wassel, a demographer and director of the Gerontology Program at the University of North Carolina at Greensboro, recently detailed a number of social and cultural patterns that intersect to explain the younger-child dimension of the senior-sandwichgeneration phenomenon (Wassel 2006). The basic demographic ‘‘cause’’ is the changing marital and subsequent family formation patterns exhibited by boomer men and women. As shown in figure 4-4, boomers married on average two to three years later in life than did their parents. In turn, this coincides with later childbearing not only due to the later marriage but also because (compared with their mothers) boomer women delayed their childbearing. Even within the baby boom, later boomer women were much less likely to become first-time mothers at age 24 than were the earlier boomers. The data for fathers point in the same direction: ‘‘Currently it is not unusual for men in their late 40s, 50s, and even 60s to become new fathers’’ (Wassel and Cutler 2007, 71). The effects of later marriage have additional ripple effects on middle-aging boomers and young children. Later marriage typically means later divorce and remarriage, with consequent second (and third) families with later-life babies, adolescents, teenagers, and tuition invoices. One recent study of remarriage found that that ‘‘in nearly half of all remarriages the couples choose to have children within 24 months of their wedding’’ (Wineburg 1990, 37). WHAT’S NEXT? While the development of financial gerontology as a subfield of gerontology and of ‘‘financial science’’ obviously has been influenced by the demographic inevitability of the middle-aging of 76 million boomers, there are clear intellectual and professional drivers as well. In the quarter-century since Davis

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Gregg and Joseph Boettner envisioned the infusion of academic gerontology into the studies of life insurance and financial practice, financial gerontology is emerging as a transdisciplinary field that speaks to both academic and professional interests. Indeed, when the issues of Social Security and Medicare reemerge and replace war at the top of the national agenda, financial gerontology also will be a component of what Lasswell refers to as the ‘‘policy sciences’’ (Lasswell and Lerner 1951). Before that moment, however, we can identify several indicators of the development of a new field of study and note that financial gerontology appears to meet the criteria of a successfully emerging field. There are four Boettner-endowed chairs of financial gerontology—at the University of Pennsylvania, Temple University, Widener University, and the American College. In addition, a Google search reveals courses with ‘‘financial gerontology’’ in the title in at least five countries. The development of a ‘‘literature’’ also serves as a foundation for the establishment of a specialized field of study. A bimonthly ‘‘Financial Gerontology’’ column has been published since November 1990 in the Journal of the American Society of CLU & ChFC, now reconstituted as the Journal of Financial Service Professionals. Writing responsibilities are now regularly shared by myself and Dr. Sandra Timmermann, director of the MetLife Mature Market Institute. Over the years, the column has had guest writers from the fields of law, sociology, and financial services. In addition to research articles in a range of interdisciplinary and professional journals, an important indicator of the emergence of the field was the publication in 1996 of the Encyclopedia of Financial Gerontology (Vitt and Siegenthaler 1996). Over 180 authors wrote 130 articles organized into eight sections including Economic and Income Security; Employment, Work, and Retirement; Family and Intergenerational Issues; Financial Advice, Investments, and Consumer Services; Health Care and Health Insurance; Housing and Housing Finance; Legal Issues and Services; and Quality of Life and Well-Being. In 2002, the American Institute of Financial Gerontology (AIFG; www. aifg.org) became the first institute to offer specialized social gerontology education and training to qualified financial professionals; more than three hundred Registered Financial Gerontologistsä (RFG) have graduated from the program (Port 2005). In 2005, the first international program was launched: the Israeli Institute of Financial Gerontology (IIFG), developed by an AIFG graduate. Currently discussions are under way for a JIFG and KIFG in Japan and South Korea, respectively—both countries that have well-developed financial advisor professions alongside rapidly aging populations. FOR BOOMERS AND FOR FINANCIAL GERONTOLOGY, THE FUTURE IS NOW The title of this chapter links the boomers’ future with the emergence of financial gerontology. As has been mentioned several times, the development

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of the field has been prompted and pushed by both scholarly and demographic pressures. For decades, demographers, psychologists, marketing gurus, financial managers, politicians, and even financial gerontologists have been discussing and dissecting, estimating and analyzing the future impact of the 1946–1964 baby boom on retirement, health care costs, financial security in general, and Social Security in particular. But now this future is here. On January 1, 2008, the First Boomer celebrated her sixty-second birthday. Kathy Casey-Kirschling is generally recognized as the First Boomer. She was born in Philadelphia at one second after midnight on January 1, 1946. Her fiftieth and sixtieth birthdays became news events to illustrate the inevitable aging of the 76 million boomers, almost always with a financial and political eye on pensions, health care, and retirement planning. Although eligibility for full Social Security benefits is rising for all boomers from age 65 to age 66 or 67, depending on the year of birth, eligibility for early but reduced Social Security benefits remains at age 62. So it is not surprising that Casey-Kirschling’s sixty-second birthday was a well-covered event as she became the first baby boomer to become eligible to claim Social Security benefits. In fact, not only was the nation’s First Boomer eligible for early benefits, but in fact she chose to take them. Because the Social Security Administration recommends that people apply for benefits three months prior to the birthday eligibility event, her decision to apply—online (another interesting generational phenomenon)—had already been a well-covered media event in October 2007 (Wolf 2007). A key question—one that combines the central elements of this chapter: boomers’ future and financial gerontology—is the degree to which CaseyKirschling’s early-retirement decision is predictive of what is to come. Recent data detailed by the Employee Benefit Research Institute suggests that the early-retirement trend of the past quarter-century is beginning to reverse itself (Copeland 2007). For many years, boomers have been characterized in the media as both wanting to retire as soon as possible and wanting to capitalize on their health and education to accomplish rewarding work well past traditional retirement ages. But economic realities changed dramatically with the stock market decline of 2001, and the dropping values of boomers’ individual retirement accounts (IRAs), Keoghs, and 401(k)s. All of this is critical material for the study and practice of financial gerontology, as millions and millions of middle-aging boomers must make financial, workforce, family, health, and personal decisions about work and retirement. And so, how does the academic side guide the applied side of financial gerontology? One current and well-documented answer is provided by a study recently published by the Urban Institute (Mermin, Johnson, and Murphy 2006). Boomer respondents age 51 to 56 (born 1948–1953) were interviewed in 2004 as part of the highly respected Health and Retirement Study (HRS; National Institute on Aging 2007). Looking at responses to a set of questions that serve as ‘‘predictors’’ of later-life work (vs. retirement),

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the boomers were compared with respondents from the 1936–1941 prewar birth cohort—who had been asked the same set of HRS questions in 1992 when they too were age 51 to 56. Elaborate analysis of the data demonstrates that the middle-aged boomers were substantially more likely to say that they will work full-time past age 62 and past age 65. The boomers’ future–financial gerontology question, then, concerns the likelihood that these middle-age boomer estimates of their own future behavior will be predictive of actual behavior. How can this issue be addressed? Three factors stand out as the probable ‘‘causes’’ of increased expectations of working past ages 62 and 65 (listed by the researchers in order of impact): • the decline in employer-sponsored retiree health benefits • higher levels of education (especially college graduation rates) • the shift away from defined benefit pension coverage

While other factors—income level, household wealth, family issues—all have some impact, the researchers concluded that the first three factors combine to explain between 81 and 100 percent of the higher levels of boomer expectations to work past age 62 (compared to the 1936–1941 prewar cohort), and between 33 and 55 percent of their higher expectations of working full-time past age 65. To what extent does this research amplify our crystal-ball gazing about ‘‘early’’ retirement decisions, as perhaps signaled by the First Boomer’s online decision to take her early Social Security benefits at age 62? The Urban Institute study suggests that it depends strongly on those three employer and workforce characteristics that the data demonstrated as influencing a worker’s expectation that he or she will continue to work in older age. Their conclusion: The erosion of employer retiree health benefits will likely persist, as health care costs continue to rise. And the trend away from traditional defined benefit plans shows no signs of abating. Taken together, these trends and the study findings suggest that the boomers will remain at work longer than the previous generation. The recent uptick in average retirement ages appears to be the leading edge of a new long-term trend. (Mermin, Johnson, and Murphy 2006, 4)

So, what about the future of boomers and of financial gerontology? Complex, challenging, fascinating, and busy. REFERENCES Bernicke, T. 2005. Reality retirement planning: A new paradigm for an old science. Journal of Financial Planning 18 (June): 56–61. Brody, E. M. 1981. ‘‘Women in the middle’’ and family help to older people. Gerontologist 21 (October): 471–80. Copeland, C. 2007. Labor force participation: The population age 55 and older. EBRI Notes 28 (6): 2–8. Available at www.ebri.org/pdf/EBRI_Notes_06-2007.pdf.

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Crimmins, E. M., Y. Saito, and D. Ingeneri. 1997. Trends in disability-free life expectancy in the United States, 1970–1990. Population and Development Review 23 (September): 555–72. Cutler, N. E. 1969. Generation, maturation, and party affiliation: A cohort analysis. Public Opinion Quarterly 33 (Winter): 583–88. ———. 1977. Demographic, social-psychological, and political factors in the politics of aging: A foundation for research in ‘political gerontology,’ American Political Science Review 71 (September): 1011–25. ———. 1990. Happy birthday to the gerontology 5,000! Journal of the American Society of CLU & ChFC 44 (November): 23–25. ———. 2002. Advising mature clients: The new science of wealth span planning. New York: Wiley. ———. 2004. Managing transitions in an aging society: The modern multiple meanings of middle age. Journal of Financial Service Professionals 58 (January): 31–38. ———. 2005. Saving too much money for retirement: Are there generational differences? Journal of Financial Service Professionals 59 (November): 28–31. ———. 2008a. Financial gerontology as transdisciplinary pedagogy. Paper presented to the Symposium on the Multiple Convergences of Aging and Business Education, Association for Gerontology in Higher Education, Baltimore, February 2008. ———. 2008b. Financial gerontology, family aging, and middle-aged boomers: Using the ‘‘senior sandwich generation’’ concept in retirement planning. Trends and Issues (TIAA-CREF Institute), January. Available at http://www.tiaa-crefinstitute. org/research/trends/trJanuary2008.html. Cutler, N. E., D. W. Gregg, and M. P. Lawton, eds. 1992. Aging, money, and life satisfaction: Aspects of financial gerontology. New York: Springer, 1992. Eisenberg, Lee. 2006. The number: A completely different way to think about the rest of your life. New York: Free Press. Gregg, D. W. 1990. Introducing financial gerontology. Journal of the American Society of CLU & ChFC 44 (November): 9. ———. 1992. The human wealth-span: A life-span view of financial well-being. 1992 Boettner Lecture, Boettner Institute of Financial Gerontology, University of Pennsylvania, October 8. Hudson, R. B. 1978. The ‘‘graying’’ of the federal budget and its consequences for old-age policy. Gerontologist 14 (1978): 428–40. Kaye, L. W., and J. S. Applegate. 1990. Men as caregivers to the elderly: Understanding and aiding unrecognized family support. Lexington, MA: Lexington Books, 1990. Lasswell, H. D., and D. Lerner, eds. 1951. The policy sciences. Stanford, CA: Stanford University Press, 1951. Mermin, G., R. W. Johnson, and D. Murphy. 2006. Why do boomers plan to work so long? Washington, DC: Urban Institute. Available at http://www.urban.org/ publications/311386.html. National Institute on Aging. 2007. Growing older in America: The Health and Retirement Study. NIH Publication No. 07-5757. Bethesda, MD: National Institutes of Health. Available at http://www.nia.nih.gov/ResearchInformation/ ExtramuralPrograms/BehavioralAndSocialResearch/HRS.htm. Port, D. 2005. A new school of thought. Senior Market Advisor (May): 93–100.

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Putney, N. M., and V. L. Bengtson. 2001. Families, intergenerational relationships, and kinkeeping in midlife. In Handbook of Midlife Development, ed. M. E. Lachman, 528–570. New York: Wiley. Schaie, K. W. 1967. Age changes and age differences. Gerontologist 7: 128–32. Schaie, K. W., and S. I. Willis. 2001. Adult development and aging. 5th ed. Upper Saddle River, NJ: Prentice Hall. Uhlenberg, P. I. 1996. Mortality decline in the twentieth century and the supply of kin over the life course. Gerontologist 36 (October): 682–85. Vitt, L. A., and J. K. Siegenthaler, eds. 1996. Encyclopedia of financial gerontology. Westport, CT: Greenwood Press. Wassel, J. I. 2006. Financial planning and the ‘‘senior sandwich’’ generation. Journal of Financial Service Professionals 60 (March): 22–26. Wassel, J. I., and N. E. Cutler. 2007. Family aging and the practice of elder law: A financial gerontology perspective. NAELA Journal [National Academy of Elder Law Attorneys] 3(1): 67–76. Wineburg, H. 1990. Childbearing after remarriage. Journal of Marriage and the Family 52 (February): 31–38. Wolf, R. 2007. Social Security hits first wave of boomers. USA Today. October 8. http://www.usatoday.com/news/washington/2007-10-08-boomers_N.htm.

5

Living and Leaving: Financial and Estate Planning for Boomers DONALD RAY HAAS

H

aving survived early and middle age, the baby-boom cohort is now facing the challenge of accumulating wealth for the ‘‘empty nest’’ and ‘‘empty career’’ stages of their lives. As well, most boomers hope to be able to transfer some portion of that accumulation to someone or some entity after their final passing. SURVIVAL STAGE AND BEYOND Most baby boomers start their adulthood living in a paycheck-to-paycheck world. Unfortunately, a few never or barely rise above that economic level. Remedial efforts for these individuals are often fruitless because they face any combination of obstacles, which may include their own inertia, lack of education, or a strong sense of entitlement. However, the vast majority of baby boomers have accepted the challenge of meeting known and anticipated economic challenges. Significant contributions to society and/or enormous financial accumulations are being produced by large numbers of productive baby boomers. High platforms of education and training (both initial and ongoing), and opportunities enabling individuals to accumulate economic resources based on those platforms, create the potential for older baby boomers to rise above mere survival in their advanced years and to move through Maslovian-like hierarchies of need.

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Moving up the hierarchy of needs follows from having developed a successful career and represents a sure path toward influence and wealth. Financial planning can be understood as the name given to successfully anticipating future needs and wants. It involves not only the continuing management of financial assets but, as well, attending to such allied concerns as college and retirement funding, budgeting, and estate planning.

Wealth Accumulation Much has been written about wealth management and the once taboo topic of discussing one’s financial life. A large number of such financial discussions have still progressed only from nonexistent to generic; many boomers have not yet reached much openness in our discussions regarding ‘‘private’’ personal financial matters. Fortunately, as the place and role of professional financial advisors becomes increasingly established, this financial coyness is slowly retreating. It goes without saying that candor in this relationship is essential if reliable advice is to be given and the appropriate steps are to be taken to move on in the direction of desired financial outcomes. Exploring ‘‘the personal’’ in financial planning terms can be difficult and a bit daunting, but it is only through such revelations and discoveries that boomers will be able to think realistically about their own prospects and to contemplate with satisfaction the ‘‘postsurvival’’ prospects of loved ones they leave behind.

A Few Key Items to Ensure Financial Success The fundamentals of wealth development include the following elements of successful money management. These are insights that have without question withstood the tests of time. ‘‘Spend Less Than You Earn’’ Charles Dickens, in David Copperfield, said it best: ‘‘Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.’’ It’s a simple concept, but one that has eluded many boomers, among others. Self-reliance and self-discipline are the two key behavioral ingredients to successful financial planning and, in turn, for ensuring future financial security. Employers and government can make useful retirement vehicles available, but it is the individual’s responsibility to use those vehicles and one’s own savings propensities responsibly.

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FIGURE 5-1. The Wealth Span in the 21st Century Changing Balance and Greater Complexity Source: Cutler, Neal E., Advising Mature Clients.

‘‘What You Accumulate during Your Working Years Is What You Will Have after You Are No Longer in Your Money-Making Years’’ As depicted in figure 5-1, Cutler (2002) illustrates how the ‘‘wealth span’’ has been changing for successive cohorts since the 1930s. Youth and education usually consume the first twenty to twenty-five years. This is followed by the accumulation stage, which is being extended in the lives of later cohorts. It is most advisable that one begin savings at the very beginning of this period, hopefully saving as much as 10 percent of what one manages to bring in. Postponing savings just makes the job harder. Thus, delaying savings until one is five or ten years into the accumulation stage translates into more having to be saved, perhaps 15 percent if one starts at age 35, 20 percent if one starts at age 45, and an onerous 30 percent if one postpones saving until age 55. The basic message is stark: all you will have in the final stage—the expenditure stage—is what you set aside during the accumulation stage. Thus, start early (age 25) and make it relatively easy; start later and strain—but at least still do it! It all starts with the concept of not currently spending all you earn. Some amount must be accumulated! The most notable benchmark of how the accumulation and expenditure periods may be changing is found in shifting retirement ages. For half a century, men had been retiring at earlier and earlier ages, culminating in only 18 percent of men aged 65 above being in the labor force in the early 1990s. However, during the last two decades of the twentieth century, this proportion bottomed out and then began trending upward as people began

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working longer. This is fortuitous, because it means that in the face of expected increases in life expectancy, new accumulation years will be added as expenditure years increase. ‘‘What Amount of Income Will Be Needed When You Stop or Reduce Your Earnings?’’ Of course, that’s an easy question to answer if you can finish the following sentence. The date of my death is _______. I’ve asked thousands of people to finish that sentence and, of course, for 999 out of 1,000, it’s impossible to do. Even the 1 in 1,000 is not positive. I have a client whose doctor told him that he had six months to live. That was over a year ago, and today my client is alive and doing okay. We never know! We need to look at average life expectancy, and then adjust this average up or down depending on one’s personal situation. The most current official life expectancy information is from the 2000 Annuity Mortality Table. It states that the average life expectancy in the United States is into the mid80s for someone who has lived to age 65. The likelihood of living from 65 to 90 has been steadily increasing (see figure 5-2). This same mortality table states that for a couple who both live to at least age 65, the average life expectancy for at least one of them is age 92 with a 16 percent chance that one will live to age 100 (see figure 5-3). There is no reliable way to know the date of one’s death, but if you accumulate enough assets to maintain an income to age 100, you are pretty safe. However, if you live into your mid-90s and are proceeding with relatively good lifestyle and health, some adjustments might need to be made. Several computer programs are available that can make this extremely difficult calculation. In any event, when determining how much you need to accumulate for this expenditure stage, assume you will live a long time.

FIGURE 5-2. Individual Aging: Survival from Age 65 to 90 Has Tripled Source: 2000 Annual Mortality Table.

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FIGURE 5-3. ous Ages.

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Percentage of 65-year-old couples, at Least One of Whom Will Live to Vari-

Source: 2000 Annual Mortality Table.

‘‘Include Inflation in All Projections of Future Needs’’ There are two sides to the inflation coin—up and down. Down is called deflation, something we have not seen in the United States since 1954 (see figure 5-4). However, deflation was at the root of the disastrous years of the 1930s Great Depression. The consequences and fear of deflation deeply affected the economic outlook and investment decisions of an entire generation. The unemployment

FIGURE 5-4. Annual Inflation Rates (1926–1954)

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rate during the 1930s was 25 percent, but that’s not the whole story. Even many of those employed lived in a very poor state of affairs. My dad was fully employed with the U.S. Post Office starting in the late 1920s and continued there until his retirement. He had taken the job believing that government employment was safe. And it was! Pinch pennies—save on everything—clean plate club—darn your socks—can’t buy new clothes (lucky if you get hand-me-downs—mend the present ones)—no visits to the barber shop (a bowl and a pair of scissors was the standard)—movies were a real treat, but we went only if we received a free plate or cup (or other gift). Many people in this Depression generation had almost no money to spend on anything but the basics. They were trained thoroughly and by the best teacher—survival. Even by the last couple of years of the 1930s, the picture was pretty much more of the same. The Depression was followed by World War II and an economy marked by rationing, limited sugar and gas (among other things), and grocery stores that by today’s standards would look all but empty. But the picture here was, once again, pretty much more of the same: ‘‘Don’t spend on anything other than the basics, and if you have anything left over, save it.’’ When recovery finally came, the principal investment rule was that you saved in safe vehicles such as government bonds. Even cash at zero interest was considered a good savings strategy—if there were another 10 percent deflation, as in 1932, you would see a 10 percent increase in the spending power of your money. The economy changed markedly in the 1950s and 1960s when we had strong economic growth, but this period was followed by the 1970s and several years of double-digit inflation (see figure 5-5). Suddenly, those who

FIGURE 5-5. Annual Inflation Rates (1955–2006)

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continued with the good old cash-and-government-bonds strategy experienced a marked decrease in the purchasing power of their accumulations. Many of those deeply affected by the 1930s experience didn’t change their investment approach, and they missed the great move to equity investments and the enormous stock market expansion of the period following the late1980s. In this expansionary environment, inflation, not deflation, becomes the potential skunk at the economic garden party. It will be important for boomers to keep their eyes on inflation, especially in the areas of health care, transportation, and housing. It is wise to be aware of these personal dynamics as you age and then to properly adjust your individual projections. ‘‘Allocate Accumulated Assets Properly’’ For the past twenty-five years, I have been recommending the asset allocation shown in table 5-1 as a starting point from which clients can adjust their personal portfolio. When I begin with a new client, very few have a portfolio within these ranges. However, over many years, most of my clients have developed this model, and when they have done so, the vast majority have become better off, with portfolios that are safer. A brief description of the categories shown in the table: • Cash is any fixed-dollar investment vehicle such as savings, money market accounts, and bonds (government or corporate). • Stock Market (Mutual Funds) is equity or growth investments in the stock market through direct ownership or via mutual funds. • Real Estate (Personal Use) is your home, second home, or vacant lots planned for personal use. • Precious Metals means investments in gold, silver, and platinum. • Tax Favored includes cash, stocks/mutual funds, or real estate when invested through any retirement plan (IRA, 401k, TSA, Pension Plans, etc.) and any other investment that has a tax advantage, such as municipal bonds, annuities, REITs, or rented real estate. • Collectibles are rare coins or stamps, Oriental rugs, antiques, and so forth.

TABLE 5-1.

Recommended Asset Allocations

Investment

Range

Cash Stock Market (Mutual Funds) Real Estate (Personal Use) Precious Metals Tax Favored Collectibles

10–20% 15–25% 20–25% 0–5% 20–38% 0–5%

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FIGURE 5-6. Portfolio Allocation Growth of $1,000 January 1, 1926 – December 31, 2006 Equity-Fixed. Source: Haas Institute for Wealth and Aging Inc. 2007.

It is easily ascertained that there is a very heavy emphasis on equity/ growth versus fixed-dollar/cash. While not a perfect guide, history suggests that an equity/growth emphasis serves one well in the long run. Figure 5-6 illustrates the increase in value, based on actual history (1926–2006), of various combinations of equity investments (as measured by the S&P 500) and fixed-income investments (long-term government bonds and Treasury bills). While one would never invest 100 percent of funds in any one type of vehicle, figures 5-6 and 5-7 do show that a relatively heavy equity investment has proven the decidedly wiser strategy over the long haul. Will the 2010s Be Different? Economic cycles change. For example, the boom times of the 1920s suddenly ended in 1929, and what followed was a decade of disaster. There are significant factors converging to change the 2010s into what could become known as the ‘‘disaster of the 2010s.’’ Of course, it’s impossible to really know (similar to stating the date of your death in advance), but you need to be alert, aware of indications of a major, possibly prolonged, sea change in the economy. This kind of upheaval occurred in the 1930s and 1970s and will potentially occur in the 2010s. If this change does happen, a new and extremely different asset allocation should be applied. Since growth in the stock market and real estate would not exist, and worse, could substantially decline, we need to revert back to the 1930s allocation. Under this scenario,

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FIGURE 5-7. Growth in U.S. Capital Markets January 1, 1926 = $1,000 January 1, 1926 – December 31, 2006. Source: Haas Institute for Wealth and Aging Inc. 2007.

all or almost all investments should be in fixed-dollar vehicles—government and corporate bonds, Treasury bills, and even cash. One possible difference could be continuing to invest in equity investment in China and India. The boomers’ birthrate peaked in 1957. They now range in age from their mid-40s to their early 60s, many having already or being about to reach their peak spending years. Smaller cohorts will follow, quite potentially spending less than did the boomers in those late-middle years. Should this transpire, there is a real danger of lower demand, lower production, and lower profits. This is the scenario that Harry S. Dent, having studied the demographic effects of the baby boomers on the economy, has been forecasting. Believing that we live in a consumer-driven society, Dent (2004) sees strong pressures on the values of both businesses and real estate in the tento twelve-year period beginning around 2010. The financial advice under this scenario centers on fixed-dollar vehicles, such as U.S. Treasury obligations and cash.

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TRANSITION FROM EMPTY NEST THROUGH EMPTY CAREER Empty Nest Hooray, the kids are gone!—of course, with a few tears. More reactions occur, such as, When is it okay for us to make the first college visit? ‘‘Our child must be lonely and missing us.’’ (More likely, ‘‘I really miss that kid and I’m lonesome.’’) The word for success in this critical transition phase is adapt. Things have changed, and so must you. The ‘‘empty nest syndrome’’ marks a discrete change from the way you were to a new you. And, it’s about the economy every bit as much as the psychological. If you planned and acted in keeping with the financial strategy outlined above, you will enjoy the fruits of your deferrals; if not, you will pay the price out of current income. Either way, when these initial years of education expenditures are past, then comes the real ‘‘sticker shock’’—what it will cost to enjoy traditional retirement, or even some modified version of it where continuing to bring in money is part of the picture. It’s time to think about funding the remainder of your life. Living longer and in mostly inflationary years will be a crippling duo, especially, for the unprepared. The words here for success, once again, are ‘‘be prepared.’’ Hopefully, the lessons set forth above will have sunk in: you will have lived on less than you earned, looked ahead to determine how much you would need in retirement (or whatever you call it), acknowledged the great probability of living a long time, incorporated potential inflation into all of your calculations, developed and maintained a proper asset allocation of your accumulations, and adjusted this portfolio for any long-term change in the economy. If early to midstream indications are that things are unsettled, it is essential that by one’s early 50s, a complete inventory of financial accumulations is undertaken and that proper adjustments are made to align future resources with long-term desires. Financial planning experience suggests that where this early-50s inventory reveals insufficient accumulations, most individuals try to commit themselves to increasing their savings to a level at least approximating the 20 percent that actuarial evidence requires of the 50-something boomer. In most cases, realizing this savings level will provide adequate retirement income; however, circumstances might also dictate that the stop-work date be moved up to age 70, or even to 75, if the same standard of living is to be maintained. Estimates by Munnell and Sunden (2006), among others, suggest that extended working years may be in the offing for more boomers than had expected it to be so. Empty Career Despite anticipating it for years, if not decades, retirement’s arrival almost inevitably comes as a surprise. But it is critical to be ready to leave a career,

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I had a client who sold his business at age 50. He was an avid golfer and decided to travel the country and play golf every day. He did just that. After a year of daily golf, he came back to me, his financial advisor, and said, ‘‘Don, there must be something else in life other than golf.’’ He was a multimillionaire who preserved his options. He was able to make a change in ‘‘retirement’’ by starting a new business and, almost two decades later, his net worth has increased fivefold. Every time over the past twenty years when I’ve talked to him, I’ve said, ‘‘George, how are you?’’ and his response is always, ‘‘Don, it couldn’t be better.’’ Actually, he travels to fish in Alaska several times a year. Oh yes, his golf game continues to improve. At age 70, he is starting to turn his business over to his two children, who are prepared for the task, so I have started to ask, ‘‘George, what are you going to do for the remainder of your life?’’ He never responds that he is going to play golf every day—he’s been there!

again with the watchwords ‘‘adapt’’ and ‘‘be prepared’’ in mind. At the very least, one wants to avoid the familiar scenario: You’re at a cocktail party and someone asks, ‘‘What do you do?’’ In the past, you named your occupation—you were somebody. Now when you say, ‘‘I’m retired’’—you are a nobody, and the other person walks away. Be prepared to feel terrible, or better yet, have an alternative response ready to go. It does not necessarily have to be a new money career (unless that is your choice), but the erstwhile retiring boomer can have the cocktail party response at the ready: ‘‘I’m a ________ and that’s exactly what I want to do.’’ It is hard to overemphasize the importance of positioning oneself to retire into something, not just from something. Because of their expected longevity, boomers in particular must address the question of what they are going to do with the remainder of their lives (see sidebar). The garage or attic can be cleaned out only so many times. Certainly, if a boomer is inclined to stay at or go back to work—and recent surveys suggest that more than 60 percent of boomers are so inclined—it is a wise step both for what it provides and what it might forestall. Hopefully, the decision to work is made based on preference more than necessity, but working—or various forms of nonmonetized activity—are almost certainly a wise course of action. TRANSFERRING LIFE ACCUMULATIONS Leaving assets to someone or some entity has the customary title of ‘‘estate planning.’’ Like each of the items of reviewed here, there are some key points to keep in mind as one considers this inevitable development. In the past, a transfer tax has been a major aspect of estate planning, because over a certain changing amount (the exemption allowance), there

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has been around a 50 percent federal tax. This tax is variously known as the Federal Estate Tax, Estate and Gift Tax, ‘‘Death Tax,’’ ‘‘Tax on the Rich,’’ and so on. Today, and probably for the future, a high exemption amount—now roughly $2 million, likely to be raised considerably higher—will free most people from this unpopular tax, but that doesn’t mean no transfer planning need take place. The transfer should surely be in accordance with one’s wishes, but understanding the methods to negotiate a clean and efficient transfer is absolutely critical. A messy transfer can quickly result in confusion, unhappiness, and even anger, notably among relatives. Consider the following scenario: Father survived his wife with three adult daughters. Father moved to a smaller town, where he had a second home. One of his unemployed daughters lived with him. In a few years, he became more frail and needed assistance. His daughter (still unemployed) took on more and more responsibilities for his care. Father was very thankful of her ‘‘taking over,’’ and upon her bidding, rewrote his will transferring to her, at his death, the home, mortgage free. Previously, father had had a competent lawyer draft all his legal documents (will, revocable trust, medical and financial powers of attorney) with language making a distribution of all assets equally to his three daughters. Father decided not to tell his other two daughters of the new will. Actually, the only people who knew about the new will were himself, his new lawyer, and the daughter who would receive his home. Father died. The new owner of the home (the caregiver daughter) told the other two daughters of this change, and in disbelief and with anger, they went to the old (original) attorney for advice. The attorney first wanted to see the new will to verify whether it invalidated the old will and/or trust, possibly disinheriting these two daughters. The original will and trust provided that at the death of the father, all assets would be in the trust and would be distributed equally among the three daughters. It was determined that the new will had been written so that only the house was transferred to the one daughter and continued to transfer everything else to the trust, leaving all the other terms of the trust intact. The outcome: The caregiver daughter received the house and one-third of everything else. The other two daughters each received one-third of the estate excluding the house, thereby receiving less than one-third (each) of the entire estate. The real outcome: Immediate and likely lifelong anger. This new will probably turned into many other negative feelings for all three daughters. The daughter who provided extensive care for the father justified his transfer of the home to her as proper. After all, she provided ‘‘all that care,’’ which ‘‘prevented’’ her from becoming employed elsewhere. If it is possible to roll over in one’s grave, I’m sure the father in this scenario is still rocking and rolling. The outcome of equally-to-all-his-daughters

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simply didn’t happen. With openness, competent advisors could have offered other solutions that could have avoided this undesired outcome—for example, income for the caregiving daughter while father was alive (more than just free rent and food), or provisions in the will and trust that stipulated the caregiver would receive her share of the total estate in the form of the home with the balance from other assets. Talented practitioners could have come up with other ideas to provide proper allocation of assets upon the death of the father. Most importantly of all, disclosing the circumstances prior to death could have helped save a good relationship among the siblings. Transferring your assets while alive or at death presents significant issues beyond tax consequences, such as: What is the consequence of a gift? Will your gift reduce a daughter’s incentive to manage for herself? Will the gift to a son of a new house that is more expensive than he can afford put him at risk of not being able to pay all of the operational expenses (taxes, insurance, upkeep, and keeping up with the neighbors who can afford this higher economic level of living) or otherwise lead to further dependency on you? Is that the result you wanted? Frequently, a large cash gift at the time of death is largely wasted. A wiser step is a cash (or in-kind) gift made while the donor is still living, designed to help train a recipient to learn how to manage and invest money rather than just spend it on frivolous or otherwise ill-advised ventures. If steps such as these are successful, then larger-than-normal outright gifts (before death) could be a good test of what was learned. A gift of education or helping to start a business, according to Thomas Stanley (1996), author of The Millionaire Next Door, is the best of all. From the professional financial planning perspective, a very important consideration in intergenerational asset transfer centers on who, in fact, is the client. It must be established that total confidentiality will be maintained. The advisor cannot reveal any aspects of the family member at any time. This brings about the question: How can a parent know what to do to help without knowledge of the child’s needs? This is an important, but a manageable, question. The advisor, having full knowledge of each unit’s financial details as well as their needs and desires, can frame discussions with parent and child that could position them to reveal necessary information to each other without the advisor doing so. It may also be that a simple request to either party for permission to reveal certain factors will protect the interests of all parties involved. Life being what it is, however, responses can range from ‘‘Are you kidding?’’ to ‘‘You can tell them that if you think it will help.’’ Finally, depending in part on a potential estate’s accumulation and attorney/planner fees, it will be important to determine which legal documents and protections are relevant to a given situation. A partial list includes a will, a revocable (changeable) trust, a living will, durable powers of attorney

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(medical and financial), and an irrevocable trust (often used with large estates or for special planning). These are known but uncharted waters for most boomers, and the foresight to plan, save, consult, and sign could save much future agony, both financial and interpersonal. REFERENCES Cutler, N. E. 2002. Advising mature clients. New York: John Wiley & Sons. Dent, H. S., Jr. 2004. The next great bubble boom. New York: Free Press. Haas, D. R. 2002. Money forever. South Boardman, MI: Crofton Press. Munnell, A. H., and A. Sunden. 2006. 401(k) plans are still coming up short. Center for Retirement Research Issue Brief No. 43. Chestnut Hill, MA: Boston College. Stanley, T. 1996. The millionaire next door. Atlanta: Longstreet Press.

II THE CIVIC WORLD OF THE BOOMERS

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Providing New Opportunities for Volunteerism and Civic Engagement for Boomers: Chaos Theory Redefined LAURA B. WILSON AND KAREN HARLOW-ROSENTRAUB

BOOMERS, CIVIC ENGAGEMENT, AND CHAOS THEORY The coming of age of the baby-boomer generation has brought about a civicengagement, social-change movement. As the first boomers begin to cross into what has previously been thought of as retirement age, they bring with them values and experiences that cause them to rethink and reshape the notion that rocking chairs, hammocks, palm trees, and golf club memberships constitute the symbols of a successful journey into these later years. While by no means a homogeneous cohort, the baby boomers as a whole are better educated, are healthier, and have greater resources than the preceding generations. They represent the first generation reaching retirement age in which a large percentage of both men and women have spent a significant portion of their adult years in the workforce amassing a lifetime of knowledge and skills. They are also a generation less likely to believe that they have adequate personal savings toward retirement, less likely to be the beneficiaries of defined benefit pension plans, and quite likely to express concern over the long-term viability of the Social Security system. How will all of these factors impact volunteerism and civic engagement by boomers? For more than a decade, researchers, policy makers, and practitioners have explored how the unique characteristics of the baby-boomer generation might affect volunteerism and civic engagement. The impetus for this concern emanates from the realization that boomers will have not only a broad array of options for their leisure time but also incentives to continue to

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work, and that this combination may truncate their volunteer participation rates. Why is this potential pattern of concern? First, as Galston and Lopez (2006) indicate, civic engagement, of which volunteerism is a component, is an essential ingredient of a stable and free society. The public institutions and processes that enable such a society must be produced, maintained, and renewed by each succeeding generation. Attuning the Boomers to Engagement and Volunteerism Overall levels of civic engagement for all age groups have declined, except, importantly, in the area of volunteerism. Over the past twenty-five years, volunteerism has increased somewhat, and this increase has been attributed to the hours of service completed by older Americans (Galston and Lopez 2006). Nonprofit and governmental organizations have depended on the resource the population over the age of 50 represents. Given the persistent attention to the uniqueness of the baby-boomer generation, however, concerns are being aired by voluntary organizations and nonprofits as to whether the boomers will sustain the levels of volunteer activity generated by preceding groups of older Americans. These concerns deepened when Robert Putnam’s groundbreaking work on civic engagement observed that ‘‘only among Americans age thirty to fifty has volunteering stagnated or declined’’ (Putnam 2000, 16). Those 30- to 50-year-olds are primarily baby boomers, thereby fueling debate as to whether boomers will choose to volunteer as they age. Research and demonstration projects have begun to evolve with more specifics on the baby boomers and their perspectives on future civic engagement. The Harvard School of Public Health–MetLife Foundation Initiative on Retirement and Civic Engagement (2004) and an AARP survey (AARP 2004) create a picture of how the 50-and-older population perceives their time and activities in the future. Respondents to the AARP survey indicate that they expect to spend time in personal development, in full- or part-time work, in leisure activities, and in volunteer work. Another AARP survey (RoperASW 2004) indicates that the shift toward expectations of continued work beyond retirement is increasingly strong, with findings indicating that 80 percent of baby boomers expect to continue working either full- or part-time. Wilson and Simson (2006) found that boomers have an interest in exploring new options, continuing lifelong learning, and being engaged in meaningful paid or unpaid work that effectively uses their skills and experience. This concept of meaningful work is further illuminated in a research brief on volunteer retention and turnover based on research conducted by the Corporation for National and Community Service (2007). Drawn from data from the Current Population Survey volunteer supplement, the research brief indicates that three out of ten baby boomer volunteers drop out after the first year. The study found that volunteer retention is greatest for those

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doing professional and managerial activities and for those doing performance, tutoring, or coaching activities, and lowest for those serving in labor or transportation areas. Attuning the Nonprofit Sector to the Boomers’ Interests Recognition that baby boomers are seeking meaningful opportunities that use their acquired lifetime of experience has led to the next set of questions. Are nonprofit organizations ready for the baby boomer volunteers? Have they advanced to viewing baby boomers as a growing valuable resource for strengthening their organizations and addressing unmet needs? Wilson and Simson (2006), in reviewing the current status of nonprofits and in assessing future planning, conclude that nonprofits cannot continue to operate as they have in the past in recruiting and working with volunteers. Making meaningful opportunities available to baby boomers requires thinking about the organization’s mission and infrastructure and the relationship between paid and unpaid staff in new ways. It is clear that the necessary shifts cannot take place only within the volunteer infrastructure but that, in fact, changes in the overall infrastructure of the nonprofit are often needed in order to create opportunities that are equally effective for both the organization and for the baby boomer volunteers. Johnson and colleagues note: Though the promotion of civic engagement of older adults must continue, without additional resources directed towards building the capacity of community-based organizations to utilize this potential tidal wave of volunteers, boomers may find themselves ready and willing with nowhere to go. The challenge of successfully tapping the potential of this enormous pool of volunteers must be approached from two directions: First, the quality, quantity and scope of volunteer opportunities available to older adults must be increased. Second, new and expanded channels for the engagement of the boomers must be constructed. (2003, v)

Bringing the Boomers and Nonprofits Together: Civic Engagement Chaos Theory It is this intersection between nonprofit organizational capacity and baby boomers’ interests and expectations that forms the basis for both action and potential chaos. As organizations grapple with the changes necessary to effect shifts in their policies and structures in order to find new ways to work with baby boomers, they have begun to experience a variety of issues that need to be more fully articulated and understood if long-term successful collaboration between these organizations and the baby boomers is to be achieved. After almost ten years of working with nonprofits to create evidence-based model demonstrations for civic engagement of the population

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over age 50, the University of Maryland–College Park School of Public Health has created a Civic Engagement Chaos Theory model to assist both the baby boomers and the nonprofits in the evolution of their relationship. Chaos theory, as it was originally conceived, was a construct of the physical sciences. It emerged from attempts to understand systems that were apparently in disorder or chaotic. Chaos theory is a tool to help find the underlying order in apparently random phenomena, describing the behavior of certain systems under specific conditions. It postulates that small changes in initial conditions of a system can produce large changes in future outcomes and behaviors. The theory finds that fairly simple relationships often underlie what appear to be complex or chaotic behaviors in systems (Hudson 1999). For example, in the behavioral and social sciences, chaos theory can be used to evaluate the complex behavior of crowds and determine that the repetitive application of simple decision rules by each individual characterizes the seemingly complex activity (Lewin 1992). In applying chaos theory to social systems, behavioral scientists have argued that the ability to function at the edge of chaos is one of the most important conditions for effective and creative problem solving (Richards 1996). While the original framework of chaos theory as applied to mathematical phenomena is not wholly transferable to understanding social systems, there are significant elements of the concept that can help us to describe social phenomena and to suggest interventions in the dynamics of social processes that may facilitate the growth and change necessary for effective social systems. The Civic Engagement Chaos Theory that provides the basis for the remainder of this chapter is intended as a simplified way of interpreting the complex relationships now unfolding between baby boomers and the organizational systems in which they volunteer. While certainly not pure chaos theory as originally defined, the constructs are meant to attract interest in and achieve expanded awareness of the phenomena observed over time regarding how baby boomers and nonprofit organizational systems interact. THE KEY COMPONENTS OF CIVIC ENGAGEMENT CHAOS THEORY: CONTRIBUTING FACTORS FROM THE BABY BOOMER AS VOLUNTEER What Is the Basis for Civic Engagement Chaos Theory? The substantive content that provides the basis for Civic Engagement Chaos Theory emerges from ten years of evidence-based demonstration models targeted at preparing for the coming of the baby boomer volunteer. These models were developed by the University of Maryland–College Park School of Public Health’s Department of Health Services Administration with the intention of ascertaining the most effective means of partnering with nonprofits to develop sustainable, meaningful roles for volunteers over the age of 50. The findings resulting in Civic Engagement Chaos Theory are drawn from the set of models developed by the University of Maryland known as

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Legacy Leadership Institutes (LLIs). The purpose of the LLIs has been the development and testing of a model for facilitation of lifelong learning, leadership skills, and meaningful civic engagement for the over-50 population by translating their skills, values, and expertise into high-impact volunteer leadership in nonprofit organizations. The LLI model serves to create a corps of volunteers who assist nonprofits in initiating innovative service programs, modernizing and strengthening organizational infrastructures, identifying and establishing sustainable financial resources, and expanding service capacity. The specific objectives are: • Integration and utilization of institutions of higher learning to create a visible centralized base for recruitment, training, and retention of volunteers age 50 and over. • Expansion of community nonprofit organizational capacity to provide needed services by creating a corps of well-prepared volunteers over the age of 50 committed to applying their time and talent to unmet community needs. • Creation of a sense of sustainable community and camaraderie through purposeful social networks generated by the service activities of the participants. • Enhancement of nonprofit organizations’ capability to effectively utilize baby boomers through the organizations’ active participation in designing new volunteer leadership and service roles, in partnership with the LLI staff. • Enhancement of the skills of paid nonprofit staff through participation in portions of the LLI curriculum. • Ongoing assessment of the impact of the project on the baby boomer and near-boomer participants, the staff of nonprofit organizations, and the communities being served.

Description on the Legacy Leadership Institute: A Recruitment and Retention Model for Volunteers Age 50 and Older to Enhance the Infrastructure of Nonprofits The Legacy Leadership Institute is a service-learning model operationalized through four components: 1. Program development: The program development phase includes integration of local nonprofits into the planning and implementation process. An initial set of meetings is held to explain the concept and determine local priorities for service expansion and infrastructure enhancement. A competitive siteselection process is used to determine the cadre of community-based nonprofit organizations that will participate in planning and receive a team of ‘‘legacy leaders’’ to work in their facility after training is complete. Project sustainability is one of the primary criteria for selection, with sites required to demonstrate a clear plan for incremental stages of sustainability. Most

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importantly, the participating nonprofits work together with LLI staff to determine one set of unmet needs and to define a unique and meaningful role that baby boomer volunteers can be prepared to fulfill in response to this need. This role must be fully articulated and becomes the basis for a job description that affords mutual understanding of what the lifelong learning and service will entail. Participating nonprofits are asked to sign a memorandum of understanding indicating their agreement to attend specific parts of the institute curriculum and to work collaboratively with both their organization and the volunteers to assure a successful experience for all. 2. Recruitment and screening of institute participants: The Legacy Leadership model is an approach not seen in traditional volunteer recruitment efforts. It emphasizes opportunities for lifelong learning, skills enhancement, and meaningful service. Each LLI accepts a maximum of thirty-five participants. The application and screening process is intentionally designed to be competitive and to mirror that of applying for a professional paid position. Prospective leadership volunteers are required to make a commitment to complete a minimum of 150–400 hours of combined instruction and community service and are asked to sign a memorandum of understanding indicating their agreement to attend all lifelong learning sessions and to complete their hours of service. 3. Curriculum design and development: The lifelong learning aspect of the Legacy Leadership Institute is an important part of recruiting trainees. The sixty- to eighty-hour curriculum is academically challenging and encourages critical thinking about organizational issues, problem solving, knowledge building, and the development of transformational leadership and volunteer leadership self-efficacy. All trainees complete a core lifelong learning curriculum that includes vision and strategic planning, program design, development and evaluation, nonprofit organizational structure and functioning, leadership, volunteer management, field visits to nonprofits, and team building. The core curriculum is followed by training in a specific volunteer role that has been designed with the nonprofits. Such roles have included volunteer coordinator, nonprofit fundraiser, nonprofit coach, volunteer legislative assistant, environmental steward, and pro bono consultant. Once the classroom experience is complete, the legacy leader volunteers begin their field service requirement by working with a team of peers assigned to a nonprofit organization to fulfill the new volunteer role. 4. Volunteer leadership service placement: When the didactic portion of the institute is complete, leaders are placed in teams to work in a nonprofit organization that has been working with LLI staff to develop new and meaningful roles for volunteers to enhance organizational capacity. Sites sign a memorandum of understanding, which includes a position description under which the volunteer team will operate, naming a designated supervisor, agreement to participate in designated portions of the formal institute, and agreement to find ways to effectively integrate the new roles into the nonprofit.

Institute Development To date, an estimated three thousand legacy leaders have been prepared to serve both nationally and internationally. Legacy Leadership Institutes

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have developed new service opportunities in partnership with a wide variety of nonprofit organizations, including those from the health, environmental, conflict resolution, municipal government, state government, state legislature, volunteer management, independent living, disaster response, aging, cultural, sport, and literacy sectors. The nonprofit organizations represent the spectrum from small grassroots groups to major international organizations with a large network of affiliates. The initial Legacy Leadership models were developed in 1999. They represent almost a decade of experience in working with the over-50 volunteer and with nonprofits. Legacy leaders and nonprofits from all completed programs are part of a quasi-experimental panel study. That design includes a comprehensive baseline survey that measures a wide variety of civic engagement and personal attitudes and characteristics at the beginning of the LLI experience. One year later, after the lifelong learning and field experiences have been completed, participants are recontacted and administered a first follow-up questionnaire, with the same scales and variables and selected new measures that tap qualitative measures of their field experiences. A third observation, the ‘‘revisit survey,’’ is collected three to five years after the experience to determine longer-term outcomes (in two sites, shorter time frames have been used for the revisit survey because of specific contractual requirements). In all analyses, time between observations is a control variable. Although earlier models of the LLIs had been piloted, the major evaluation and panel study began in 2002. Almost five hundred U.S. legacy leaders are currently being followed, and as new institutes are launched, those members enter into the panel study. Approximately one hundred have been out of the institutes for at least three years, and those are the primary focus of this analysis. Instilling Commitment One of the major goals of all LLI projects is to increase the awareness of community needs and commitment to one’s community with the assumption that highly committed individuals are likely to remain involved over time in some sort of community contribution. For boomers, this pattern seems particularly important, given the findings from the Corporation for National and Community Service study (2007) that boomers tend to drop out at higher rates than other groups. Thus, major components of the evaluation identified the reasons or motivations for joining LLIs and changes in levels of attachment to their communities. The first focus provides social programmers with a basis for building lifelong curriculum and volunteer experiences that appropriately tap into and hold the ‘‘market’’ of boomers as long-term participants in civic and volunteer activities, thereby avoiding the turnover problem. The second measure over time provides evidence-based documentation of the types of changes that do or do not occur in a variety of volunteer activities and sponsoring organizational structural models.

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FIGURE 6-1. Motivational Patterns for Participants 24 Years or Older

The average age of legacy leaders ranges from 53 to 65 in each LLI, with most of the mean ages clustering around age 60. Forty-three percent are male, and 24 percent are racial or ethnic minorities. Some of the institutes attract individuals who are experienced volunteers, but across all institutes 15 percent have never volunteered, and in some the attraction of new volunteers who have never served is as high as 50 percent (Harlow-Rosentraub, Wilson, and Steele 2007). Figure 6-1 describes the types of motivation that members report in the baseline survey. It shows baseline responses of all legacy leader participants in the study, and the baseline and long-term follow-up of the hundred-plus leaders who have been out of the institute for a longer period of time. At baseline, the initial motivations of all the LLI participants and the subsample of the long-term follow-up group emphasize the importance of personal fulfillment issues, such as expanding one’s knowledge and skills or utilizing knowledge and skills in meaningful ways. Helping people and involvement in the community are also strong indicators, but they trail the personal fulfillment motivators, which are described as instrumental motivations in the literature (Tschirhart et al. 2001). Exploring future jobs or volunteer opportunities and moving to paid employment (also instrumental motivators) are of moderate importance. In the long-term follow-up, however, many fewer choices for motivation for joining are reported, although respondents were instructed to check as many as applied. Viewing their motivation retrospectively, they made fewer choices and were more likely to describe their motivation in altruistic terms, such as helping

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people in the community or being involved in solving community problems. Expanding knowledge and skills and utilizing knowledge and skills dropped from 75.8 and 77.3 percent, respectively, to 33 and 32 percent, respectively. Other studies of motivation and volunteering have suggested that initial goals for joining voluntary organizations may be dynamic, and that once initial goals are achieved, those original goals decrease in importance and new goals may be established. That may well be the situation observed here, and qualitative information gathered during the first year of training and deployment into projects would support that supposition. Boomers join Legacy Leadership initiatives because they are presented as new opportunities for lifelong learning and expansion of their skills. They are immersed in new work environments and communities, and this exposure may engender new goals and motives for continuing to participate. The basic assumptions of the Legacy model that stress the importance of increasing commitment to community that can lead to increased civic engagement and community sustainability for nonprofit organizations are reinforced by the measures of change in community attachment over time. The scale used in this study contains five Likert-type response questions that ask about involvement in the community, knowledge of the needs of the community, and an understanding of what to do to meet those needs as well as perceptions that the leader can make a difference in his or her community. The maximum score is 25 for individuals who strongly agree with each statement: 1. I feel that I make a contribution to my community. 2. I have a strong attachment to my community. 3. I have a good understanding of the needs and problems facing the community in which I serve. 4. I am aware of what can be done to meet the important needs in my community. 5. I feel I have the ability to make a difference in my community.

The scale is included in the baseline and in every follow-up. Figure 6-2 charts the changes experienced at the different Legacy Project sites, both at the first follow-up and among the long-term follow-up respondents. The changes from baseline at each site are positive and significant, with each group reporting higher levels of attachment to their communities. Among the long-term follow-up participants, this level is still substantially higher than at baseline even years after participating in the project, even though small and statistically insignificant drop-off occurs in some sites. Moreover, in followup, 93 percent of the legacy leaders are still volunteering in an average of four types of community activities. This long-term commitment rate exceeds the rates found in the Current Population Survey data reported by the Corporation for National and Community Service (2007). Thus, the higher rates of

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FIGURE 6-2. Long-Term Outcomes by Type of Institute. The community Capacity Institute’s frame is 18 months rather than 3–5 years.

dropping out by boomers in other studies can apparently be counteracted by developing meaningful roles and couching them within lifelong learning programs, with the caveat that the program must be prepared to deal with the initial problems and misgivings that may be introduced into the systems (both the person and nonprofit systems) that these new volunteers represent. THE KEY COMPONENTS TO CIVIC ENGAGEMENT CHAOS THEORY: CONTRIBUTING FACTORS FROM VOLUNTEERS This understanding of who participates and what impact these models have on the levels of civic engagement of the legacy leaders forms the basis for understanding how the baby boomer volunteer can play a role in Civic Engagement Chaos Theory. The theoretical framework for this theory is depicted in figure 6-3. There are four elements of Civic Engagement Chaos Theory that originate as a result of inputs from the baby boomer volunteer: 1. 2. 3. 4.

Passionate purpose Novelty factor Interrupted mastery Pathway to fantasy

The University of Maryland and others have continued to refine and update civic engagement models for the 50-plus population. Each new Legacy

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FIGURE 6-3. Theoretical Framework of Civic Engagement Chaos Theory

Leadership Institute incorporates findings from previous institutes that will enhance the concept and strengthen the relationship between the volunteer and the nonprofit. Each iteration follows the same basic model, with small changes either necessitated by the requirements of the partnering nonprofits or emerging from knowledge gained through prior models. The Legacy Leadership models are designed to ameliorate many of the problems and concerns expressed by both the baby boomer and the nonprofit about how best to incorporate new or enhanced elements of volunteerism into existing nonprofits in a manner that will both attract baby boomers and meet the growing needs of the organizations in which they will serve. The Legacy Leadership model is a very intentional design, with numerous formal and structured opportunities to assure increased understanding about how paid and unpaid staff can work together effectively. The preplanning with the nonprofit sector, the signed agreements by both the volunteers and the nonprofits, the extensive classroom lifelong learning, and the opportunity for ongoing feedback and continued learning by both the organization and the volunteers during the field placement are all elements important to facilitating the entry of highly experienced and well-prepared volunteers into new roles in the organizations. After extensive experience with implementation of these highly structured models, it has become evident that even the most carefully planned transition and the most intensive didactic preparation cannot provide a complete guarantee against some degree of chaos as the baby boomer volunteers become engaged with the nonprofits. Increased structure and greater understanding about the attitudes and behaviors of all participants could help prepare for the inevitable chaos but could not provide the basis for avoiding it. Ultimately, it became clear that, for both volunteers and nonprofits to move forward, accepting and preparing for the chaos could become the basis for

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stronger infrastructure and better relationships. It also became clear that the chaos was not, in fact, random. Specific repetitive patterns evolved regardless of any particular changes made to the initial Legacy Leadership model. Changes associated with the length of the institute, the type of participating nonprofit, the location, the sponsoring organization, or the curriculum did not circumvent chaos. These repetitive patterns form the basis of the Civic Engagement Chaos Theory. Passionate Purpose The first element of chaos introduced repeatedly by the over-50 volunteers is termed ‘‘passionate purpose.’’ The recruitment process associated with LLIs is designed with the intention of attracting baby boomers or those near to the baby-boomer cohort to serve. The recruitment advertisements are geared toward attracting the attention of this population in the most enticing and innovative ways possible. The ads are based on the results of focus groups and research that had already defined the concerns of baby boomers regarding their views of volunteering and their fears that the majority of opportunities were too mundane and would entail envelope stuffing or towel folding (Wilson and Simson 2006). While these are viable and necessary tasks, the boomers were quite clear that such tasks were not likely to engage them or keep them engaged over time. The advertisements for the LLIs make no mention of volunteering. Instead, they ask, ‘‘Are you ready for your next challenge?’’ and proceed to define an opportunity to become engaged in an important issue facing nonprofits. The intent is to pique the boomers’ interest enough that they will call and ask for more information, so that the basic tenets of the program can be explained. With each institute exploring new roles and relationships, this approach allows for essential understanding of the concept before the potential volunteer decides whether to apply. When asked during the initial class of each LLI why they had decided to apply, the majority of participants indicate that they were ready for their next challenge and that the institute provided that opportunity. Participants also state regularly that they had been looking for something like this in which to become involved but had not been able to find such programs or roles. They were looking for something to be passionate about that would use their skills and talents in a way that would be meaningful to both themselves and the nonprofit. When they come to the LLI, they understand they are making an intensive commitment to a role and to an organization, and they find this fulfills their desire for a passionate purpose. This passionate purpose contributes to civic engagement chaos when it comes in contact with reality. There is a strong desire to find a way to make a difference and to have a vehicle that will facilitate action. The desire for passionate purpose on the part of the

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baby boomer has not always been previously tempered by the reality of the nonprofit world. As the findings demonstrate, many participants had never done any volunteering before participating in an institute. For many, this was also their first time working in the nonprofit sector. Only 16 percent had had any previous experience in the nonprofit sector. Almost half worked in the for-profit sector, while one-third came from government. They can see clearly how many needs exist, and they can see that they have both the passion and the skills to make a difference. What is less obvious to them, at least initially, is that their passion to make a difference can come into direct conflict with the current structure and functioning of a nonprofit. Many of these boomers have had both human and financial resources and extensive infrastructure to accomplish tasks in their current or previous jobs. Their passionate purpose is frustrated by the realities of nonprofits’ limited resources and infrastructure. They learn that there may not be the funds to implement a critical idea or that paid personnel may be too overwhelmed to follow through on a project about which the boomer volunteer has become passionate. In one instance in a Legacy Leadership Institute, a leader at one site became so frustrated with his inability to implement what was viewed as a necessary innovation that board of directors’ involvement was sought, resulting in a temporarily conflictual situation. Although this particular incident was successfully resolved, the situation demonstrates that resulting contribution to civic engagement chaos is difficult for both the volunteer and the organization. Both sides are left to figure out how to answer the question of how such sincere passion and desire to contribute can result in significant outcomes rather than frustration. The resulting process changes both the volunteer and the organization. Novelty Factor The second contributing factor to Civic Engagement Chaos Theory on the volunteer input side of the equation is the novelty factor. It has already been noted that the boomers are looking for specific opportunities to meet their aspirations regarding what will be worth their time and effort. When they find such an opportunity, such as Legacy Leadership, they come with high expectations concerning the experience. They have been recruited into these new models using innovative approaches that appeal to their desire to lead again. They have been leaders in the work world and are looking for unique ways to do so again. In the Legacy Project, the term leader was chosen for two reasons. First, the boomers have indicated that volunteer has a negative and stereotypical meaning from their perspective. Therefore, new terminology signaling a different approach to volunteerism was necessary. Second, the boomers see themselves as having been leaders (93 percent) and may be searching for the

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experience to lead again. The Legacy Leadership program carefully explains to the applicants both before and during the program the type of leadership they will be learning and practicing. This is nonpositional leadership, or how to lead from the inside of an organization as part of a group and not from a formal position of leadership. Since only a limited array of opportunities to be seen as a leader are available, the baby boomers are influenced by the novelty of having found such an experience. They are seeking to do something unique yet meaningful, and they are attracted by the notion that they can be among the first to participate and to help shape such a concept. This novelty becomes a contributing factor in civic engagement chaos as the novelty aspects fades and they are faced with the reality that they cannot function in the more traditional ways they have thought of as leadership. While the boomers are doing something novel and potentially meaningful, once they get beyond their initial excitement and intrigue about the potential, the work of making it possible in the context of the day-to-day realities of a nonprofit can overshadow the power of the novelty. Being volunteers instead of paid staff and needing to forge new pathways to get things done can lead to chaos. It can also lead to failure to sustain engagement if the structure is not available to assist in making the transition from novelty to reality. Both the nonprofit and the volunteer struggle to find means to move beyond novelty to something that is long-term and sustainable. In Legacy Leadership, recognition of the novelty factor has produced multiple models and opportunities within a single geographic area. Legacy leaders find ways to stay civically engaged within the overall structure even while they are seeking new and novel approaches because they see new options to move toward. That 93 percent are still involved in multiple voluntary activities up to five years after their LLI experiences speaks to the success of creating multiple models and opportunities. Interrupted Mastery The third contributing factor by baby boomers to Civic Engagement Chaos Theory is interrupted mastery. Repeatedly, research and theory regarding the boomers addresses the higher levels of education and the extensive levels of expertise that distinguish this generation. When baby boomers embark upon new experiences as volunteers in new settings and with new structures and expectations, an unanticipated type of chaos can ensue almost from the very beginning. New opportunities to engage boomers are being developed to utilize their background and skills in the most effective ways possible while still providing the opportunity for personal growth and development. These new civic engagement opportunities are being designed to attract highly competent and experienced individuals. The contribution to Civic Engagement Chaos

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Theory ensues when the newly recruited volunteers quickly begin to express doubts and concerns regarding their ability to undertake the new tasks effectively. They are used to functioning in an environment where they have known what the expectations were and where there is a clearly defined system for rewarding their abilities. As they move into these new volunteer opportunities, those familiar structures that allowed them to define success are no longer clearly visible. Perhaps because they are passionate about making a difference, and most certainly because they are now in unfamiliar territory, the boomers seek strong reassurance that they have the capability to be successful and not to disappoint either themselves or the nonprofit. What has caused this unexpected insecurity regarding the transferability of their skills into the nonprofit sector? This experience is interrupted mastery. When a boomer seeks to translate knowledge and skills into a new volunteer experience, the sense of mastery over both the context and the outcome is interrupted by the need to acquire new understanding about how the systems work and how they fit into those systems. There is opportunity for chaos at all phases of this process: during the application phase when they seek assurance that they are the right individuals for this opportunity, during the training phase when they are mastering an understanding of nonprofits and new roles, and in the service phase when they are about to enter into the nonprofit and actually have to apply their life skills and their new skills in an organizational setting that is new to them. The chaos that evolves from interrupted mastery is twofold. First, the volunteers are often taken by surprise by their experience of these new feelings of uncertainty regarding their capabilities, and second, the organizations seeking to utilize their skills are surprised that reassurances may be needed by these highly skilled baby boomers as they attempt to find new avenues of engagement. Pathway Fantasy The fourth contributing factor by the boomer volunteer to Civic Engagement Chaos Theory is pathway fantasy. This final contributing factor evolves from the potential failure of a civic engagement work site to live up a baby boomer’s expectations. Despite significant preparation for the experience, some volunteers struggle with the reality that any workplace, including in the nonprofit sector, has both positive and negative features. In nonprofits, which often have limited staff, everyone is responsible for making sure things get done, including making coffee and duplicating materials. New to the environment and prepared to take on existing challenges, the baby boomers are not always able to make an assessment of the tasks that paid staff are doing, and they may become disappointed if they are asked to do the kind of supporting tasks they had hoped to avoid as a part of their work. In addition to this aspect of pathway fantasy, at least some of the baby boomers who choose to enroll in LLIs have been looking for a way to engage

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in the nonprofit sector that will lead to full- or part-time paid employment in a meaningful role. They are highly motivated to have an experience in the institute that will result in fulfillment of their more comprehensive longterm plan. Chaos can erupt when they find that not only is the nonprofit sector not always as they had imagined but also it may not be ready or able to absorb them into paid or even long-term sustainable unpaid positions, as they had hoped. The baby boomer’s fantasy about what might be possible in terms of a new pathway to contributions to society in later life is challenged. The boomer is used to success through hard work and determination. This possible disruption of this dream can lead to loss of commitment to helping the nonprofit sector unless alternatives and solutions are readily available. THE KEY COMPONENTS TO CIVIC ENGAGEMENT CHAOS THEORY: CONTRIBUTING FACTORS FROM NONPROFIT ORGANIZATIONS Understanding the baby boomers’ perspective and creating meaningful roles formed the first phase of the civic engagement social movement. Quickly, however, as innovative ways to engage and deploy baby boomers began to emerge, a concomitant and equally important need developed. This need was to assure that the nonprofit sector was ready for this skilled and often demanding potential volunteer. The Legacy Leadership Institute process has been refined and adjusted repeatedly in order to ascertain the most effective ways to prepare the nonprofit for the boomer volunteer and to allow both the nonprofit and the boomers to work together prior to the field experience to assure a smooth transition. Contributing factors by nonprofits to Civic Engagement Chaos Theory continue to occur regularly despite this process and generally fall into four areas: 1. 2. 3. 4.

Stereotyping Pattern behavior Systemic commitment Collaboration dysfunction

Stereotyping as a component of civic engagement chaos is most likely to occur at the very beginning of the process of finding ways for the baby boomers to work in meaningful ways in a nonprofit. Despite the fact that many of the individuals who are on paid staff in the nonprofit sector are, in fact, themselves baby boomers, they have an image in their minds of laterlife volunteers. This stereotypical image can limit their perspective on what kinds of actions and outcomes are possible when thinking creatively about boomer involvement. This kind of stereotyping keeps the nonprofit from seeing the baby boomer as a critical resource that could be used in new ways to meet significant challenges unless he or she can be funneled into the

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more traditional board member role. Nonprofit staff have also been influenced by the overall stereotype of a boomer as a ‘‘me first’’ generation member who will not be able to function as a part of the nonprofit team. Chaos as a result of stereotyping can affect all phases of the development and implementation of new civic engagement opportunities. A second area of Civic Engagement Chaos Theory related to the nonprofits is patterned behavior. In the past few years, the nonprofit sector has been inundated with information about the reality that the baby boomers are coming and that there is a need to develop new understandings and options in order to attract them as volunteers. Still, awareness and interest in responding to this phenomenon do not always translate into significant change in the way the nonprofit functions. Day-to-day operations in busy and understaffed nonprofits are patterned behaviors that are difficult to change even when highly motivated executive directors and senior managers want this to happen. There are often so many tasks that must get done and are usually completed in a habitual way that opening the way to new thinking and new patterns is a difficult transition. Chaos emerges when the baby boomer volunteer intentionally or unintentionally disrupts the traditional order, even when encouraged to do so. The third area of chaos inducement that can occur is systemic commitment. As noted above, it is often the innovative and visionary leaders of today’s nonprofit organizations who are early adopters in making commitments to new ways of engaging volunteers. With regard to Legacy Leadership, many of these individuals have been nonprofit professionals who were able to see the potential the baby boomers represent in transforming their organizations and helping them to move in new directions. Where the potential for chaos develops is in the translation of this creative thinking and drive for change to other staff within the organization. The executive director or board chair who envisions new roles that baby boomers can play in their organization is not always the one who will implement the vision. Other staff members, who may not have participated in the planning and thinking about these changes, are far less prepared and committed to the new volunteer roles and to providing the staff time it will take to implement such roles. Systemic commitment as a contributor to civic engagement chaos results from the filtering down of an idea from the passionate commitment of an organizational leader to the day-to-day operations staff who may not share this vision. Finally, nonprofit organizations play a role in Civic Engagement Chaos Theory through collaborative dysfunction. This dysfunction in collaboration can occur at several levels. First, some nonprofits have difficulty in working through collaboration issues that result from new models. In Legacy Leadership, this collaboration chaos can be the result of the nonprofit sector working with a higher education institution. Each side brings to the process its own understanding, or lack thereof, regarding the other sector. Working

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through the process to achieve an understanding of how the two can work together effectively can be a chaotic process. In addition, collaborative dysfunction is likely to occur at numerous points in the endeavor to work with the baby boomer volunteer. Lack of a shared vocabulary, shared history, and common vision can lead to chaos even when both parties are committed to success and have been prepared on how best to reduce the potential for strain. This process is ongoing, because as the baby boomers become more deeply engaged in the organization, new forms of collaborative dysfunction can emerge from different sectors of the organization. Each new incident of collaborative dysfunction creates further stress for the nonprofit and the volunteer, as well as creating new opportunities to make changes in the infrastructure and how it functions with respect to its volunteers. PATHWAYS TO SUCCESS: MOVING BEYOND CIVIC ENGAGEMENT CHAOS THEORY The social movement that has evolved around baby boomers and civic engagement is still in its evolutionary stages. Increasing efforts have been made to provide new civic engagement options. Numerous funders and several national organizations have taken up the task of helping to bring to light the creative endeavors of nonprofits across the United States to engage baby boomers and to disseminate this information. Local community foundations have been encouraged to develop incentives for creating new civic engagement activity in the nonprofit sector. As these actions continue to evolve, more attention is being focused on helping the nonprofit sector to better respond and more effectively integrate the new type of volunteer the baby boomer represents into their organizations. The progress that has been made over the past few years is formidable. In defining Civic Engagement Chaos Theory in a very concrete and distinct manner, it is hoped that both the baby boomers and the nonprofit organizations seeking to come together can make more effective transitions. The intended outcome of defining civic engagement chaos is that, through the recognition that many of these facets of the theory are repetitive and commonplace, both parties will at the very least be better prepared and less surprised by the emergence of chaos. As more and more nonprofits employ new processes and programming to engage boomers, we may expect different kinds of chaos to emerge. These observations represent an early stage in organizational development regarding new roles for volunteers. As policies and experience both inside and outside nonprofits begin to shift in response to a changing environment, organizations will begin to institutionalize these changes, and new kinds of civic engagement chaos are likely to appear as a result. If understood to be a part of the process of change, these newer iterations also can be effectively managed.

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While civic engagement chaos seems an integral part of the process of change, there are some key understandings that can help ensure increasing success as more nonprofits attempt to work with the baby boomers. It is not enough to understand that each has different expectations, different experiences, and different approaches. Adequate preparation, opportunity to learn from and build on the experiences of others, and a spirit of adventure and cooperation will smooth the process and help to create order out of the chaos. Naming the issues and working through solutions together should result in stronger nonprofits and better volunteer output. We are poised at the edge of a great chasm: nonprofits need new human capital in order to meet the growing needs of an expanding and aging population, and baby boomers represent a huge demographic with the capability of helping to respond to these needs if they can not only be attracted to service but also be enticed to stay and sustain their service. It is in everyone’s enlightened self-interest to make inevitable chaos the basis of strong patterns of change and success. REFERENCES AARP. 2004. Time and money: An in-depth look at 45+ volunteers and donors. Washington, DC: AARP. Available online at http://www.aarp.org/research/ reference/publicopinions/aresearch-import-498.html. Corporation for National and Community Service. 2007. Keeping baby boomers volunteering: A research brief on volunteer retention and turnover. Washington, DC: Corporation for National and Community Service. Galston, W. A., and M. H. Lopez. 2006. Civic engagement in the United States. In Wilson and Simson 2006, 3–19. Harlow-Rosentraub, K., L. Wilson, and J. Steele. 2007. Volunteering, lifelong learning and community cohesion. Journal of Voluntary Action 8 (1). Harvard School of Public Health–MetLife Foundation Initiative on Retirement and Civic Engagement. 2004. Reinventing aging: Baby boomers and civic engagement. Boston: Harvard School of Public Health and MetLife Foundation. Available at http://www.hsph.harvard.edu/chc/reinventingaging/Report.pdf. Hudson, C. G. 1999. At the edge of chaos: A new paradigm for social work? Journal of Social Work 36 (2): 215–30. Johnson, C., M. Parel, M. Cobb, and D. Uy. 2003. The strength of the infrastructure of volunteer agencies and its capacity to absorb ‘‘baby boomer’’ volunteers. Working paper presented at the conference ‘‘Baby Boomers and Retirement: Impact on Civic Engagement,’’ Washington DC, October 8–10, 2003. Lewin, R. 1992. Complexity: Life at the edge of complexity. New York: Macmillan. Putnam, R. 2000. Bowling alone: The collapse and revival of American community. New York: Simon & Schuster. Richards, R. 1996. Does the lone genius ride again? Chaos, creativity, and community. Journal of Humanistic Psychology 36 (2): 44–60. RoperASW. 2004. Baby boomers envision retirement II: Survey of baby boomers’ expectations for retirement. Washington, DC: AARP. Available online at http://research. aarp.org/research/work/retirement/aresearch-import-865.html.

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Tschirhart, M., D. Mesch, J. Perry, T. Miller, and G. Lee. 2001. Stipended volunteers: Their goals, experiences, satisfaction, and likelihood of future services. Nonprofit and Voluntary Sector Quarterly 30:422. Wilson, L. B., and S. P. Simson, eds. 2006. Civic engagement and the baby boomer generation: Research policy and practice perspectives. New York: Haworth Press.

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Gearing Up for the Big Show: Lifelong Learning Programs Are Coming of Age RONALD J. MANHEIMER

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ituated between the three-story redbrick building and the playground of the elementary school that I attended in the early 1950s were a couple of single-story wooden buildings everyone called the ‘‘portables.’’ You attended third grade in one and then marched over to fourth grade in the other. As the name implies, the buildings had been fabricated elsewhere and transported to the school site, where they were needed to accommodate the sudden surge in school population. I later learned that other schools in our city had portables, too. A few years later, as a senior, my school day ran from 7:30 A.M. to 1:00 P.M. according to a schedule called a ‘‘split shift.’’ Though the high school was quite newly built, it could not accommodate the throngs of teenagers of my urban neighborhood all at one time. For decades, educational institutions, along with government agencies, businesses, and other groups have raced to catch up with the demographic fact that, after the ‘‘birth dearth’’ of the Great Depression years in the United States, a huge jump in fertility rates occurred immediately following the end of World War II. The portables are part of a long history of temporary classrooms and brand-new school buildings still smelling of paint that many baby boomers have experienced. Now those former third and fourth graders are looking toward another set of hastily assembled classroom structures. These portables, to use the term metaphorically, serve to support a host of lifelong learning programs that have cropped up in a variety of settings.

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Today’s array of educational programs for midlife and older adults have a kind of temporary, ad hoc quality that makes them both timely and slightly marginal. Most of the lifelong learning programs in the United States spring from a grassroots rather than a nationally planned and coordinated effort. With little conscious historical precedent, they seem to have come from nowhere (Manheimer, Snodgrass, and Moskow-McKenzie 1995). And though they have multiplied, diversified, and grown, their long-term viability and sustainability remains in question. This is because many of the programs are tangential to the main missions of their host institutions, their financing is tenuous, they depend heavily on volunteers, and their existence is a by-product of a new and perhaps transitional, socially constructed life stage, the ‘‘Third Age’’ (Manheimer and Moskow-McKenzie 1995). This new segment of the life course, as Peter Laslett has so well documented, began to emerge in Britain and the United States in the 1950s, bringing a whole new set of opportunities and choices for how average citizens in midlife might elect to spend their later years—including in pursuit of lifelong learning (Laslett 1991). But the Third Age is no more stable than the socially constructed stages of adolescence or childhood. Roles and activities of midlife continue to change as cultural attitudes about aging and the economic conditions surrounding retirement change. Shifts in social policies to encourage people to remain longer in the workforce and concerns about financial security not keeping up with longevity may dramatically alter the availability of leisure time or how it is utilized. Despite these uncertainties, and whether the myriad of new programs and organizations are permanent or impermanent, these ventures—hundreds of them in the United States and similarly thousands to be found in postindustrial countries with rapidly aging populations around the world—are in a ‘‘rehearsal stage’’ compared to what will come next (Manheimer 2005) The massive population expansion of people in their 55-and-over years is only just now happening. The curtain is rising in front of the ‘‘really big show.’’ How that show may play out is the subject of our inquiry. THE BIG SHOW The cohort reaching retirement age in the next twenty years will regard opportunities for continued learning as not a privilege but a given, a natural and valued part of the new retirement lifestyle. U.S. citizens who have obtained a bachelor’s degree or higher are especially likely to participate in some form of lifelong learning, since educational attainment is the chief predictor of pursuit of continued learning. While 19.5 percent of individuals who were 65 and older in 2006 had achieved a bachelor’s degree or higher, about 30 percent of those in the 40–59 age range had done so (U.S. Census Bureau 2007). This means that the combination of higher levels of educational attainment and much larger actual numbers of people (approximately

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80 million in the 40–60 age segment, compared to 35 million U.S. citizens over 65) should produce a huge boon for those engaged in the business of lifelong learning. But as that resource is increasingly accessible only through the payment of fees and with those who have lower levels of educational attainment less likely to participate, a widening gap between the haves and have-nots is already occurring. The diversity and plentitude of currently available lifelong learning programs is the product of the boomers’ parents’ generation. It was from among the generations labeled the ‘‘Civics’’ and the ‘‘Silents’’ that leadership emerged to create a multitude of mainly nonprofit educational programs, primarily for those who had retired from full-time work. Existing programs operate at the organizational margins of institutions of higher education, through the auspices of a certain department store chain, by both for- and not-for-profit travellearning organizations, as a feature of local senior centers, in adult community education programs, via agricultural extension programs (most notably, the Master Gardener program), through religious congregations, as part of residential retirement communities, in public libraries, through certain trade unions, and as part of numerous private and cooperative arts-and-crafts studios. Some of these programs cater primarily to those who are seeking vocationally related learning opportunities as they pursue continued employment and postretirement careers. Other programs attract those who mainly seek intellectual stimulation and the fellowship of others who are similarly inclined. Some programs promote peer-learning and teaching in communitybuilding environments that depend on a high degree of volunteerism, while others follow the more traditional continuing-education department model of employing professionals to implement curricula developed by paid professional staff. Some programs are and may continue to be clearly identifiable as age- or life-stage-related (e.g., Elderhostel, Center for Creative Retirement, SeniorNet), while others blend participants into age-integrated classes and programs or, even when predominantly attracting midlife and older adults, have no age or life stage designations (e.g., Sanford Enrichment Center, Road Scholar, the Renaissance Society). Who will participate in the coming years, and how and why, will be shaped by a variety of factors, such as individuals’ needs or desires to continue full- or part-time paid employment, accessibility (financial and geographic) to programs, the stability of the U.S. economy in sustaining health and income safety nets (e.g., Medicare, Social Security, private pension plans), and the availability of leisure time to large numbers of people. Hardto-predict variables such as the price of gasoline and severe weather due to global warming could seriously impact participation rates regionally and nationally. Continued innovation in digital technology (e.g., the digitalizing of television transmission across the United States) will also create vast opportunities for ‘‘open university’’ and ‘‘virtual college’’ types of learning programs accessible from homes or on the road.

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LIFELONG LEARNING PROGRAMS: A SAMPLER In order to give some indication of the variety and purposes of lifelong learning programs currently operating in the United States, consider the following brief profiles. College- and university-based Lifelong Learning Institutes or LLIs arose in the mid-1970s, in part influenced by a prototype, the Institute for Retired Professionals (IRP) established in 1962 at the New School for Social Research (now New School University) in New York City. The IRP invited the participation of individuals seriously interested in intellectual subjects and willing to join small study circles based on specific scholarly pursuits to which they would contribute in turn. More than a decade would pass before a handful of similar member-led, member-taught educational programs appeared in the mid-1970s. But by the mid-1980s, there was a sharp rise in the rate of new programs started each year until, by 2007, there were more than four hundred of these programs across the United States and Canada, almost all linked with colleges and universities (for a brief history and current listing of LLIs in North America, visit the Elderhostel Institute Network website, http://www.elderhostel.org/ein/intro.asp). LLIs are unique not only because members are in charge but also because they are based on a financial model that requires participants, besides providing free labor and leadership, to help pay for the cost of their own continuing education. This financing method may seem unexceptional, but at the time of the model’s inception, the idea that older learners should pay some portion of the cost of their own education was unprecedented. Previously, most older learner programs were free and generally depended on the largesse of private and public foundations and government subsidies. That earlier funding basis explains why programs were so often episodic, coming and going in repetitive cycles of ‘‘demonstration projects’’ that left no infrastructure behind. Perhaps the selffinancing business model of most continuing education departments influenced LLIs where, institutionally, they are most often organizationally situated. Today, the network of LLIs is loosely linked through affiliation with the Elderhostel Institute Network (EIN), a consortium supported in part through the largesse of Boston-based Elderhostel (more about which will follow). EIN makes available an extensive website that lists member programs in the United States and Canada, posts monthly newsletters, and provides extensive material on curricula, by-laws, how to start an LLI, and so on. A second, newly emerging network of LLIs derives from the beneficence of the Bernard Osher Foundation, which has generously funded 117 Osher Lifelong Learning Institutes (or OLLIs), some of which are completely new and others remodeled and expanded versions of existing programs. OLLIs meet annually at a national conference, share a scholarly and informational journal, and gain the benefit of cross-fertilization and program-sharing through a national coordinating office based at the University of Southern Maine.

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During this same fertile period that saw the rise of LLIs, we find initiation of a lifelong learning component in the faith-based, volunteer-run Shepherd’s Centers. A nonprofit community organization sponsored by a coalition of religious congregations, Shepherd’s Centers are committed to the delivery of services and programs for older adults. In 1972, the first Shepherd’s Center was founded by Dr. Elbert C. Cole in Kansas City, Missouri. Twenty-three churches and synagogues joined in an interfaith effort to provide a ministry by, with, and for older adults. Today, more than seventy-five Shepherd’s Centers in twenty-one states comprise a network of 15,000 volunteers serving over 175,000 older adults. The services and programs of the Shepherd’s Center are designed to empower older adults to lead creative, productive, meaningful, and interdependent lives. One of the many programs offered by the Shepherd’s Centers is the Adventures in Learning program, which utilizes older adults as both teachers and students, planners and participants. Classes are normally held weekly, biweekly, or monthly. The purpose of the educational program is to provide an environment where older adults may share their knowledge, talents, skills, and new interests with their peers. A committee of volunteers makes the program decisions regarding curriculum, faculty, marketing, and evaluating. This committee is composed of faculty and students with backgrounds in education, public relations, administration, the arts, health, and clerical services. Most of the teachers are older adults who volunteer their time, knowledge, and skills. OASIS is a consortium of business and not-for-profit organizations designed to challenge and enrich the lives of adults 50 and older. Educational, cultural, health, and volunteer outreach programs are offered at the OASIS Centers to provide participants an opportunity to remain independent and active in community affairs. In 1982, the May Department Stores Company, the original major national sponsor, provided OASIS with dedicated meeting and activity space in many of its stores. Initial support for the program was provided by the Administration on Aging. In 2005, Federated Department Stores bought out the May Company and inherited the OASIS program, which it continues to support in partnership with BJC HealthCare. The OASIS national office establishes program quality requirements and overall management and operations guidelines. Currently there are thirtyone OASIS Centers operating from coast to coast, with more than 350,000 members. Each center has permanent and specially designed space for offices, student lounges, and meeting rooms. Courses are offered in the areas of visual arts, music, drama, creative writing, contemporary issues, history, science, exercise, and health. Many courses are held in collaboration with local medical, cultural, and educational institutions. Volunteer outreach is an important component of the OASIS program. Many participants are trained in the Older Adult Peer Leadership (OAPL) program, to teach classes in the community, and to work in intergenerational

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programs helping young children. In 1990, more than 2,000 volunteers gave over 110,000 hours of their time to run the OASIS sites. As an aside, it is worth noting that the name OASIS was originally used as an acronym for Older Adult Services and Information Systems but, as with many organizations seeking to avoid aging stereotypes and sound less like a social service agency, it changed the name to just OASIS, though it still uses a tag line that reads: ‘‘Enriching the lives of mature adults.’’ In 1986, SeniorNet, based in San Francisco and with initial support from the Markle Foundation, was established to encourage older learners to discovery the benefits of computer-based information, communication, and the creative use of computer software. Subsequently, more than 240 SeniorNet centers have cropped up in senior centers, at public libraries, within LLIs, and in some retirement communities. SeniorNet sites also exist in other countries. During the 1970s, with funding and mandates based on the Older Americans Act, the ‘‘multiservice’’ senior center concept began to flourish. Activities and services available at approximately 15,000 local-, city-, and county-funded centers included hot meals and nutritional education, health education, employment services, transportation assistance, social work services, educational activities, creative arts programs, recreation, leadership, and volunteer opportunities. The recreation-education component of senior center programming varies with the availability of community resources and interests of participants. Some of the more common activities include arts and crafts, nature studies, science and outdoor life, drama, physical activity, music, dance, table games, special social activities, literary activities, excursions, hobby or special interest groups, speakers, lectures, movies, forums, roundtables, and community service projects. No sampler of lifelong learning programs should fail to include one of the longest established and most successful: Elderhostel, Inc. Launched in 1975 at the University of New Hampshire as an inexpensive, weeklong campus summer residency program for people 55 and over, Elderhostel grew quickly and spread throughout colleges and universities in the United States and then abroad. The results of a collaboration between maverick educator Marty Knowlton and university administrator David Bianco, Elderhostel typifies those lifelong learning ventures launched without any serious feasibility study, but rather through the visionary leadership of a couple of innovative individuals. Initially intended as a travel-learning program that might provide a taste of college-level intellectual life to those who had not been able to attend college, the program has mainly attracted college graduates (a large percentage of whom are either former teachers or spouses of teachers). Begun as a modest experiment with a social mission, Elderhostel quickly turned into a big business, requiring a telephone call-in center and, later, online registration technology and a marketing and research division. Because Elderhostel now has many competitors, it must strive to update its image in order to attract a

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new generation of increasingly sophisticated and discriminating consumers. In 2004, Elderhostel launched Road Scholar, a set of more physically challenging, smaller-group tours designed to attract a somewhat younger midlife population. Additionally, Elderhostel has undertaken a number of market research studies that provide insight into current and future participant attitudes. The goal of a 2005 Elderhostel study was to determine into what categories a representative national sampling of people age 55 and over might be grouped in terms of attitudes toward health (mental and physical), mental stimulation, and lifelong learning activities. Two groups, whose attributes were summarized by the labels ‘‘Focused Mental Achievers’’ and ‘‘Contented Recreational Learners,’’ were found to comprise 47 percent of those surveyed, while ‘‘Anxious Searchers,’’ ‘‘Isolated Homebodies,’’ and ‘‘Pessimists’’ made up the rest. When a similar survey was directed toward former Elderhostel participants and 2,311 responses were analyzed, it turned out that 49 percent and 35 percent, respectively, fell into these first two categories (Elderhostel 2007). That was fortunate for the multimillion-dollar nonprofit business, since these two categories comprise those individuals who are likeliest to sign up for continued learning opportunities. Moreover, Elderhostel researchers predict that these two favorable psychographic groupings will be even more highly represented among members of the boomer generation that is just easing its way into the retirement years. This sampler is meant to indicate the range and types of programs that came to fruition in the United States over the past forty years. It reveals that the lifelong learning movement that seeks to attract midlife and older adults has transformed itself from operating in a social service framework (providing leisure-time activities for the ‘‘deserving elderly’’) to one that is more entrepreneurial—part of what Harry R. Moody (2004/2005) calls the ‘‘silver industry.’’ To this array of programs, we must add other host sites—such as community colleges, the YMCA and YWCA, Jewish community centers, art museums, hospitals, and trade unions—that have attracted large numbers of people in their 50s, 60, and 70s to partake in educational opportunities not specifically targeted to people by age or stage of life, or at least not identified as such. State legislation, mainly initiated in the early 1970s, has enabled thousands of citizens above a designated age (usually 65 but sometimes 62) to attend regular college and university classes on a tuition-free, space-available basis. Work-related educational programs sponsored by major companies constitute another large resource for people in midlife as part of retraining or upgrading of technical and managerial skills, and to a lesser extent as part of preparation for retirement. A snapshot of the trend can be found in data provided by the National Center for Educational Statistics. Reporting on the academic year 2004–2005, the center found that 23 percent of Americans 65 and older

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participated in some type of formal adult education activity, while 40 percent of those 55 to 64 did so, as did 48 percent of 45- to 54-year-olds. Workrelated courses attracted 5, 27, and 37 percent of these three age groups, respectively, and 19, 21, and 20 percent were signed up for courses that matched personal, rather than vocational, interests (National Center for Educational Statistics 2006, table 1). More difficult to obtain are statistics on the thousands of people who participate in informal, noncredit programs such as the LLIs and SeniorNet types. We must rely on reporting from local sites that may or may not be tallied by a national office or some other participation rate survey method to get some idea of the scale (as indicated earlier). LEADERSHIP PROGRAMS There is a strong linkage between lifelong learning programs, volunteerism, and leadership. For one thing, the characteristics of those drawn to lifelong learning programs—higher levels of education, careers in professions and in managerial roles, and, to a lesser extent, relative economic well-being—are the same attributes of those who are likeliest to volunteer time to social causes and civic improvement organizations and the likeliest to play leadership roles in those groups. Lifelong learning programs such as LLIs are themselves examples of organizations that benefit from their members’ contribution of time, talent, and sometimes money and from the leadership members provide, whether through teaching, serving on committees, or heading up governance groups. Many LLIs claim they promote volunteerism in their surrounding communities, though this may amount to little more than posting notices of volunteer opportunities. Some LLIs—the North Carolina Center for Creative Retirement (NCCCR), for example—actually run their own leadership programs. In the case of the NCCCR, that campus-based organization (part of the University of North Carolina–Asheville) has, for twenty years, conducted Leadership Asheville Seniors (LAS), an eight-day program that gives participants a close look at the town and surrounding area’s history, ethnic makeup, cultural values and folkways, economy, governmental infrastructure, health, cultural, and educational resources. Graduates of LAS play major volunteer roles in the community and, in some cases, use their new knowledge to start organizations and businesses. NCCCR has also helped other North Carolina localities start similar senior leadership programs. In addition, NCCCR runs Leadership Training for Older Persons (LTOP), a free, six-month-long skill- and confidence-building program that invites underserved seniors such as low-income and minority persons to prepare themselves to become advocates for their peers. LTOP graduates become board and committee members of community organizations that sometimes provide them with services. They also play vital roles in neighborhood associations (a report and replication guide for Leadership Training for Older

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Persons can be found at http://www.unca.edu/ncccr/LTOP/LTOP_Replication_ Guide.pdf). Another exemplary leadership program grew from findings of research conducted by the University of Maryland’s Center on Aging. Asked what would be necessary for boomer-aged adults to pursue serious involvement in volunteer activities, researchers discovered the answer: opportunities for personal growth, continued learning, participation in a purposeful social networks working toward clearly defined goals, and activities that deepened their sense of meaning. Legacy Leadership Institutes (LLIs) took this information to create a program that combined classroom and practically applied training in the art of nonprofit organizational management. These programs now exist in several U.S. cities and in Europe (Wilson 2006/2007). Several major corporations and a number of agencies that work with corporate retirees also recruit midlife and older adults for short-term domestic and international assignments. The U.S. Peace Corps, denominational associations, and other groups also prepare and send off retirees for voluntary assignments that hold great potential as learning experiences. As nineteenth-century historian and political thinker Alexis de Tocqueville pointed out, Americans are especially fond of volunteer associations. But, of late, concern has been expressed that baby boomers may be too selfpreoccupied and TV- and Internet-afflicted to accept the baton handed off by their highly civically minded parents’ generation. Therefore, a strong push is under way to convince the emerging neo-elderly to consider the needs of others. The message that civic engagement advocates bring to the ‘‘Me Generation’’ is that freedom should not be uncoupled from responsibility. Great concern is expressed, for example, in a 2004 report from the Harvard Center for Health Communications that baby boomers will not volunteer to the degree of their parents’ generation and that even if they did, the infrastructure does not exist that would enable society to use them appropriately (Harvard School of Public Health–MetLife Foundation Initiative on Retirement and Civic Engagement 2004). While educational programs for older learners are not obligated to incorporate community service as an element of their mission and rationale, the combination may hold particular appeal for socially conscious neo-elders. Perhaps this option should be part of a learning, leadership, wellness, and service quaternary for future programs. There is, however, an ongoing debate among social gerontologists as to whether the civic engagement drum is being beaten to cajole those with newfound leisure time on their hands to take charge of social services and charitable causes as part of a self-responsibility movement aimed at decreasing the role of government agencies and, therefore, public funding. Those promoting seniors’ involvement in civic engagement are finding themselves in a political and ideological battlefield that is certain to intensify (Hudson 2007).

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COGNITIVE GYMNASTICS, BRAIN-MAINTAINING ARTS, AND PHYSICAL CULTURE A number of surveys have indicated that of health concerns, besides losing their youthful looks, ballerina-like balance, and somewhat questionable memory capacity, a majority of baby boomers fear that they may eventually become demented or, worse, a victim of Alzheimer’s disease. In response, a whole new industry has cropped up. Emphasizing a recent revision in neurological assumptions, researchers now report that the brain does, indeed, continue to produce new brain cells and dendrite connectivity. Consequently, the old ‘‘use it or lose it’’ adage, now scientifically supported, has helped create a multimillion-dollar industry of computer-based cognitive retraining programs designed to improve memory functions; linguistic, mathematical, and spatial problemsolving abilities; and even hand–eye coordination. These cognitive retraining and enhancement programs are frequently marketed through language drawing from the world of physical fitness (e.g., ‘‘mental gymnastics’’). While the exercise programs are not themselves educational in the narrow sense of the word, they do provide learning opportunities and purportedly function, by analogy, in a way that is as adjunctive to intellectual activities as strength training regimens are to the playing of sports. Besides these computerized retraining programs, many other activities, ranging from crossword puzzle solving to learning to play an instrument or speak a foreign language, are touted as helping to keep the mind sharp. The American Society on Aging annually awards a MindAlert prize to programs that demonstrate a contribution to promoting mental acuity. The great emphasis on lengthening midlife as long and far as possible is certainly an admirable one, even if it is partially driven by a fear of death and a rejection of whatever people imagine it is to ‘‘grow old.’’ That there are many techniques and resources for slowing aging—even if, currently, most do not meet strict standards of scientific verifiability—will no doubt add to the attractiveness of lifelong learning activities (Salthouse 2006). A few programs actually hint at or directly state that participation in their program could impede the aging process and contribute to ‘‘brain health.’’ So, it is not surprising that pragmatic reasons have been given for older persons’ participation in the arts. Gene Cohen, for example, headed up a two-year Creativity and Aging Study that, with the use of multiple sites and control groups, has demonstrated positive health advantages of activities such as singing in choirs—reducing visits to doctors’ offices, lowering the use of medicines, helping to offset depression, and generally adding to the older persons’ quality of life (Cohen et al. 2007). These positive results, Cohen and his colleagues underscore, contribute to reducing health care costs that society must shoulder. This utilitarian rationale for older persons’ participation in the arts and in other forms of lifelong learning may attract government support and that of the health care and insurance industries.

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The problem with utilitarian justifications for lifelong learning, though, is that they can distract from the intrinsic value and pleasure of these activities, even further extending the medical model of aging into realms formerly safe from health outcome measures. Many intellectual, cultural, and artistic activities would lose their appeal were they tainted by the odor of disinfectant and the clinical seal of approval as contributing to mental alertness. This, however, may be a matter of packaging, since one can use a certain vocabulary and set of rationales for obtaining research and grant money and another for inducing people to sign up for programs. Our third category, physical fitness, is also a burgeoning industry, with health clubs, spas, fitness centers, and seniors-only sports leagues growing by leaps and bounds while new books, magazines, and websites spring up to celebrate the benefits of proper diet, good balance, cardiovascular endurance, agility, flexibility, and the corollary mental health benefits of physical robustness. T’ai Chi and yoga also have become highly popular with midlifers because they combine the benefits of balance and flexibility training with an aura of spiritual enhancement. Blended modalities such as ‘‘yogalates’’ (yoga plus Pilates) may offend the purists who worry that mixing disciplines distorts the central purposes of either martial arts forms or traditional spiritual movement practices. But in the true American spirit of the cafeteria approach to all things good and beneficial, these hybrids are sure to gain in popularity. Again, should these types of exercises be included in lifelong learning? Indeed, what could be more valuable than gaining greater knowledge about one’s body and skill in preserving or even improving its functionality? The ‘‘physical culture’’ (to use an old-fashioned expression befitting the architecture of some fitness centers that look more like temples than gyms) industry will continue to expand to meet the expectations of health-conscious boomers who, ironically, show higher rates of obesity, diabetes, and musculoskeletal ailments than did their parents’ generation. CHAMPIONING LIFELONG LEARNING: PROSPECTS FOR THE FUTURE Currently, organizational leadership in older adult education is fragmented and decentralized in the United States. Only on rare occasions have organized groups lobbied Congress or state governments for increased funding to educational programs primarily serving midlife and older adults. A Lifelong Learning Act was passed in 1976 but was never funded. There are, however, a number of national associations that have subcommittees or constituency subgroups focusing on and advocating for older learners. For example, the American Society on Aging (ASA) has its Lifetime Education and Renewal Network (LEARN), composed of about 250 individuals whose work (usually only in part) is associated with some form of older adult education; the Association for Continuing Higher Education (ACHE) has its Division of Older Adults; and the Association for Gerontology in Higher Education

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(AGHE) concentrates primarily on professional-level teaching of gerontology and to a slight extent on education for seniors. A majority of the Lifelong Learning Institutes are members of the loose-knit Elderhostel Institute Network consortium. A service of the Elderhostel organization, EIN’s main activities consist of biennial regional conferences, maintenance of an informative website, and advice on how to start new Lifelong Learning Institutes or expand their curricula. PROSPECTS FOR THE FUTURE Speculating on the near-term future (the next fifteen years), as a correlate to these trends, lifelong learning opportunities will increasingly become a function of the marketplace. Those who are in sufficiently good health, are motivated by having enjoyed prior years of education (the main predictor of participation), and can afford to enroll in Lifelong Learning Institutes, pay for travel-learning excursions, sign up for continuing-education courses, register for back-to-campus alumni seminars, access Internet educational sites, or choose from among a cornucopia of other lifelong learning programs will reap the benefits of ‘‘successful aging.’’ Educational programming for baby boomers especially will be a thriving business that deans of continuing-education programs and directors of for-profit travel-learning companies, among others, are (or should be) discovering. We should expect an increase in demand for vocational education for second and third careers, with likely emphasis on technical, managerial, and business-related training needs. Also, retirement communities associated with colleges and universities should experience a surge in growth. Those who do not fare so well because of poor health, limited incomes, or lack of motivation because of more restrictive prior education (especially minority neo-elders) will find comparatively little from which to choose in the way of intellectually challenging programs. In fact, those who do not fit the image of successful aging will be chastised as somehow ‘‘failed agers,’’ a moral castigation of those who seem not to have seized the opportunity to age well. It doesn’t require much reflection to see that this scenario is an extension of current trends. Educational programs that hold onto the current nomenclature—selfidentified as being for elders, retirees, or seniors—run the risk that they may age in place, mainly attracting a frailer, older population. This trend is already occurring at some of the most popular Elderhostel sites such as the famous music conservatory the Peabody Institute. The shift to age-neutral program names will not be enough to achieve organizational rebranding to capture the neo-elderly. The challenge for many programs will be how to retain a unique identity if they elect an age-neutral mantle. Such programs have the added challenge of continuing to service their existing participants as they grow frailer and age in place.

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Lifelong learning programs in the United States and Canada will continue to mirror their countries’ economic systems. These programs—whether conducted through colleges, senior centers, hospitals, libraries, or religious congregations or sponsored by private-sector organizations such as banks, department stores, and travel-learning agencies—will remain market driven and will increasingly require full fees or some form of ‘‘copayment’’ for enrollment. Returning to our original analogy of the ‘‘portables,’’ lifelong learning can be compared to that segment of the housing industry that caters to midlife and older adults. The entry of a large and diverse boomer population into the Third and Fourth Ages will accelerate trends that are already occurring for more diverse types of housing. These ‘‘niche markets’’ include patio homes; age-qualified communities (both freestanding homes and condos); amenityrich, concierge-service condos and apartments; full-service retirement communities (continuing care or life care models); assisted-living facilities; university-linked retirement communities; retirement villages (health care being separate); and now the attention-getting ‘‘virtual communities’’ such as Beacon Hill Village, in which older neighborhood residents pay fees for a conciergebased menu of home, health, and transportation services. In addition, we will see increased interest in both intergenerational and elder cohousing communities (tightly clustered villages that include commonly owned property and community centers equipped with kitchens and dining rooms for communal meals, and often with other such amenities as arts studios, meditation rooms, libraries, and so on, depending on members’ preferences). Similarly, lifelong learning for midlife and older adults will accommodate both highly individualized small-group, as well as traditional large-group (‘‘windshield’’), travel-learning programs. Cooperative art studios that offer both training and studio space for practicing one’s art or craft will grow dramatically, especially in towns with strong arts-and-crafts traditions and in college and university towns. Online courses offered by public and private universities and through a wide range of other vendors (libraries, art museums, online special-interest magazines) will greatly enhance the independent learner’s range of resources. Academic programs at colleges and universities designed to enable midlife adults to ‘‘recareer’’ will also be popular, as will certificate programs for both vocationally related and personal development–oriented learners. These certificate programs could qualify people for paraprofessional levels of involvement in social causes (e.g., the Center for Creative Retirement offers a Blue Ridge Naturalist certificate for those who seek to deepen their commitment to environmental causes) or to enter a postretirement career in, for example, real estate, accounting, biotechnology, child care, patient advocacy, or library work. Temporary as portables, some programs will disappear or be absorbed into existing administrative units of host organizations, losing their previous age or life-stage designation, and other programs will find themselves lodged in appropriate spaces and more permanent buildings. If, as some predict, a

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majority of baby boomers scorn association with older age–identified groups, preferring age-integrated activities and learning programs, then there will be a sharp fallout of a good many programs. Opportunities for innovation in the field of lifelong learning beckon the visionary individual and group who recognize we have come a long way from portables to the big show whose curtain is about to go up. REFERENCES Cohen, G. D., et al. 2007. The impact of professionally conducted cultural programs on the physical health, mental health, and social functioning of older adults—2 year results. Journal of Aging, Humanities and the Arts 1 (1–2): 5–22. Elderhostel. 2007. Mental stimulation and lifelong learning activities in the 55+ population. Boston: Elderhostel. Available at http://www.elderhostel.org/research/ lifelonglearning/LifelongLearning55.pdf. Harvard School of Public Health–MetLife Foundation Initiative on Retirement and Civic Engagement. 2004. Reinventing aging: Baby boomers and civic engagement. Boston: Harvard School of Public Health and MetLife Foundation. Available at http://www.hsph.harvard.edu/chc/reinventingaging/Report.pdf. Hudson, R. B. 2007. Terms of engagement: The right and left look at elder civic activism. Public Policy & Aging Report 16 (4): 13–18. Laslett, P. 1991. A fresh map of life: The emergence of the third age. Cambridge, MA: Harvard University Press. Manheimer, R. 2005. The older learner’s journey to an ageless society: Lifelong learning on the brink of a crisis. Journal of Transformational Education 3 (3): 198–221. Manheimer, R., and D. Moskow-McKenzie. 1995. Transforming older adult education: An emerging paradigm from a nationwide study. Educational Gerontology 21 (5): 613–32. Manheimer, R., D. Snodgrass, and D. Moskow-McKenzie. 1995. Older adult education: A guide to research, programs, and policies. Westport, CT: Greenwood Press. Moody, H. R. 2004/2005. Silver industries and the new aging enterprise. Generations 28 (4): 75–78. National Center for Educational Statistics. 2006. Adult education participation, 2004–05. Washington, DC: National Center for Educational Statistics. http:// nces.ed.gov/pubs2006/adulted/tables/table_1.asp?referrer=report. Salthouse, T. A. 2006. Mental exercise and mental aging: Evaluating the validity of the ‘‘use it or lose it’’ hypothesis. Perspectives on Psychological Science 1 (1): 68–87. U.S. Census Bureau. 2007. Current Population Survey, 2006: Annual Social and Economic Supplement. Washington, DC: GPO. Wilson, L. B., et al. 2006/2007. Civic engagement and lifelong learning. Generations 30 (4): 90–94.

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Booming Opportunity: Philanthropy, Aging, and Recognizing That the Glass Is Half Full ROBERT MARTIN AND ALAN PARDINI

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t a time when much of the baby boomer phenomenon is discussed in terms of its potential to strain our society’s core social, political, economic, and cultural structures, philanthropy offers something revolutionary and hopeful: the opportunity to reframe and expand the discussion, transform our notion of aging, and energize a shared sense of possibility for solving our communities’ most pressing and intractable challenges. Philanthropy is leading the way toward a startling recognition: the ‘‘problem’’ of an aging society is actually a colossal asset, a glass much more than half full. The implications for older adults and for society as a whole are profound. Philanthropy is able to discern this unexpected truth because of its unique role in American society as a neutral catalyst, a sector whose primary strength is the capacity to leverage money, knowledge, and relationships to effect change. Among the many interested parties addressing issues of aging, philanthropy excels in its ability to step outside established frameworks, convene stakeholders, analyze options, develop long-range strategies, and motivate others to act. Government has financial resources but contends with political pressures. Theoretical and empirical approaches distinguish academic institutions and think tanks, yet these institutions have no mandate to act on the knowledge they create. The private sector offers marketdriven efficiencies but also has its own agendas and struggles with activities that don’t bring near-term profits. The nonprofit sector has great expertise and experience but lacks resources and the ability to coordinate for

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maximum impact. The media influence agendas and frame the public discourse but have limited ability to take direct action. Meanwhile, individuals—including older adults themselves—are given voice only by working through these mediating institutions or, in some instances, by exerting political or economic pressure from the outside. While foundations certainly bring points of view to the table, their overriding mandate is to serve the broadly defined public good—not the interests of voters or campaign contributors, nor the concerns of customers or shareholders. External realities have further motivated the philanthropic sector to stake out neutral territory: Foundations have highly flexible financial assets at their disposal, but those assets are extremely limited in the context of the problems philanthropy takes on. In practice and out of necessity, philanthropy works as an influencer rather than as a central player. Its money alone could never produce deep and sustainable change given the scope and complexity of the issues it tackles. Instead, foundations use relatively small amounts of money to bring stakeholders together, to pool knowledge, and to stimulate action. Foundations are mobilizers and facilitators, with a keen understanding that complex problems require collaboration, conflict management, and compromise. Because of their limited resources, many also are predisposed toward innovative solutions that are designed to leverage small shifts to effect larger, systemic changes. Although foundation giving has nearly tripled in the last decade, it remains a small influence relative to other capital sources and in comparison with the power of public policy to enact change. With total giving of just over $40 billion in 2006, the most recent year for which data are available, the nation’s 77,000 grant-making foundations had an aggregate financial impact equivalent to two-thirds that of the budget of New York City, less than one-sixtieth the budget of the U.S. government, and, for comparison’s sake, only slightly more than the net profits posted that year by the nation’s most profitable company, ExxonMobil (Foundation Center 2007). This amount represents all U.S. private, family, corporate, and community foundation giving, across the full spectrum of issue areas domestically and internationally—from education to the environment, from animal welfare to the arts. Of this, the fraction foundations historically have directed toward the issues of older adults consistently hovers around 2 percent, or roughly $800 million in 2006 (Weiner and Solomon 2007). The boomer aging issue, meanwhile, is framed by figures of sobering magnitude: a population numbering in the tens of millions, potential Medicare and Social Security shortfalls counted in trillions of dollars. Virtually every major element of societal infrastructure will be affected: health care, housing, transportation, and work, to name only the most obvious. Our values, traditions, and forms of cultural expression will be tested and reshaped. The transformation will be far-reaching and historic. In this context, what can $800 million accomplish? What does philanthropy have to contribute?

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FRESH PERSPECTIVES, CREATIVE APPROACHES Philanthropy is predicated on a deep confidence in people’s ability to come together as a community of shared interest to overcome challenges and embrace opportunities. The sector’s need to maximize resources, its mandate to address the full spectrum of interrelated public concerns, its willingness to grapple with structural complexity, and the premium it places on collaboration all create space for fresh perspectives and creative solutions. ‘‘Philanthropy has the luxury of not being government, of having private resources, of being able to bring innovative approaches to problems,’’ notes Len McNally, a program officer who works in the area of aging at New York Community Trust. The Trust is one of the largest and oldest community foundations in the nation, one of more than seven hundred dedicated to raising funds and supporting a broad range of charitable programs within specific geographic areas, usually cities or counties. ‘‘We can fund new models, break the mold. And one thing philanthropy does especially well is convening people to talk about important issues, in neutral places that aren’t subject to government pressure.’’ In the case of boomer aging, philanthropy can help stakeholders move past rhetoric and exaggerations to confront a more nuanced reality. ‘‘One of the things we constantly hear in the press is that we have a looming catastrophe with the baby boomers,’’ McNally observes. ‘‘‘Medicare’s a crisis.’ ‘Social Security is a crisis.’ ‘The country can’t afford the retirement generation.’ It’s doomsday, and it’s quite concerning to me because we actually have a very reasonable amount of time to prepare sensibly and carefully. There are solutions. The crisis isn’t tomorrow. Philanthropy can bring people together so that we can talk about this reasonably, with a sensible, thorough discussion of this issue free of political and profit-making interests.’’ Carol Farquhar, executive director of Grantmakers in Aging, a network of more than a hundred funders, also believes that philanthropy has a wide and vested interest in aging. The issue touches almost every program area, she notes, regardless of whether a funder technically makes grants in aging. ‘‘Older adults are a population that is embedded in our society,’’ she notes, ‘‘and it’s very difficult to extract it out whether you’re talking about the arts or education or environmental concerns or neighborhood revitalization. And aging is so broad—it can be meals on wheels or Alzheimer’s work, or it can be art and creativity in your later years, or it can be older adult volunteers working on environmental problems.’’ Although foundation assets are relatively modest, they typically offer a great deal of flexibility and can be used to draw to the table constituencies that might not otherwise be inclined to collaborate. Convening is a vital, and ideally ongoing, process in which diverse stakeholders—often with conflicting perspectives or agendas—come together to analyze a perceived problem, explore dependencies and other contextual factors, inventory assets,

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and identify potential solutions and opportunities. It is this process of bringing together different viewpoints that can lead to breakthrough thinking, the development of unexpected and innovative approaches, the emergence of revolutionary models, or, just as importantly, the recognition that simple or tried-and-tested solutions might work best. The sector’s openness to rethink accepted wisdom—challenging doomsday scenarios, for example—and the freedom it enjoys to pursue virtually any course it believes is in the public interest are, in fact, facilitating a remarkable and accelerating shift in philanthropy’s approach to aging issues at a time when the leading edge of the boomer generation has reached retirement. It is a shift in thinking that will have far-reaching consequences not just for philanthropy but for all of society. Two decades ago, foundations working in aging focused mostly on the challenge of affordable, accessible health care, supportive services, and longterm care for the frail elderly. By the mid-1990s, foundations had begun to expand their understanding of aging issues, and many were funding programs designed to promote productive aging, end-of-life and palliative care, mental health, and transportation (Weiner and Solomon 2007). Even today, most aging-related foundation funding remains concentrated on the fragile and infirm—a logical extension, in fact, of philanthropy’s core orientation toward helping society’s neediest. But this is slowly changing. Brian Hofland is director of the aging program at the Atlantic Philanthropies, one of the world’s largest funders in this area. He and a growing chorus of his colleagues are vocal about the sector’s historical approach and why it has to evolve: ‘‘Foundations working in aging tend to fund projects that deal with people who have serious frailty or impairments requiring supports for activities of daily living—walking, eating, toileting, bathing, and dressing. Yet these people are the minority of the older adult population: only 15 to 20 percent.’’ New York Community Trust’s McNally agrees: ‘‘Most elders aren’t sick, aren’t dependent and won’t become dependent until a long time after they retire. If you retire at 65, the onset of serious disability might not be for 15 years. What are we doing with this whole group of soon-to-retire people who aren’t what we traditionally thought of as elderly?’’ In recent years, as these and other prominent funders have begun to revisit conventional attitudes toward the place of older adults within society, the philanthropic sector has begun to take a look at its own assumptions and increasingly is looking at aging as part of a more holistic and interdisciplinary framework. From this perspective, the fact that some elderly people do need support is only part of the story. Older adults have vast skills and talents, and the majority are healthy and able-bodied. Even those with chronic but manageable conditions, such as high blood pressure or arthritis, are able to contribute productively. The experience and expertise of this population, rather than being ignored, should be harnessed for a wide range

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of public benefits. ‘‘Society is looking at older adults as people who need services,’’ argues Hofland. ‘‘The big missed opportunity is to recognize older adults as our fastest growing national resource.’’ AN OPPORTUNITY WE CANNOT AFFORD TO IGNORE Marc Freedman, who in the late 1990s founded the think tank Civic Ventures to advance a new concept of aging, is author of Encore: Finding Work That Matters in the Second Half of Life. He calls the potential mobilization of older boomers the ‘‘experience dividend’’ and warns that treating older adults as needy and dependent means ‘‘writing off the most experienced segment of the population in the middle of their productive years’’ (Freedman 2007, 6). In large numbers, older adults want to perform work that serves a greater good. Far from frail, many of these men and women are fit, focused, and looking forward to new challenges. Millions are determined to apply their experience to make a difference for others. Some are able to do so as unpaid volunteers. Others are looking to combine the income and health benefits of employment with elements of service through second careers tailored to their interests and circumstances. Yet too often, the enthusiasm of this population is stymied by perceptions, policies, and practices that discourage the sharing of experience. As a result, this growing number of Americans represents a largely untapped resource in a nation with many unmet needs. The effort to engage older adults for civic good—and to transform the way society embraces its oldest members—may be one of the most important aspects of work undertaken by foundations in the coming decade. Whether through special initiatives or by adapting ongoing work to leverage the unique contributions offered by older adults, foundations are planning for a future in which this vital, expanding segment of our population is meaningfully, productively engaged. One particularly ambitious effort to recalibrate philanthropy’s approach in this area is a multiyear national initiative to develop new learning and knowledge about community-level resources and strategies for engaging older adults. Underwritten by the Atlantic Philanthropies and launched in 2006 as the Community Experience Partnership (CEP), the project was developed as a pool of thirty community foundations and their collaborators, from communities across the country of all shapes and sizes, who are tackling the issue of older adult civic engagement. In 2006 and early 2007, the partnering foundations designed and conducted local research on programs, policies, organizations, and strategies that engage older adults in addressing civic needs, as well as the barriers that prevent older adults from full, productive engagement in their communities. Going forward, these foundations will be building on this research and developing pilot programs that rely on older adults to help solve important issues in their communities.

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The main purpose of the initiative’s first phase was to shine a light on this complex social issue. By taking the time to ask questions—How are older adults woven into and strengthening the fabric of our communities? How do our communities invite and welcome the valuable contributions of their older adults?—the thirty communities have developed a body of knowledge about the subject. Although each of the CEP’s communities identified challenges and opportunities that were special to their own circumstances, major themes emerged consistently across the research projects. Taken together, the research outputs reveal a complex picture of older adult civic engagement and offer lessons not just for the world of philanthropy but for many stakeholders, including older adults, their families and neighbors, employers, the nonprofit sector, government and policy makers, educational institutions, and the media. OLDER ADULT ISSUES ARE EVERYONE’S ISSUES Many CEP communities discovered that older adults not only are civically engaged but also are among the most active participants in communityoriented work. ‘‘A clear theme that keeps coming up is people want to have a purpose in their life, they want to be doing something different,’’ notes Therese Ellery, senior program officer at Denver’s Rose Community Foundation. Research at the Princeton Area Community Foundation in New Jersey points to a growing population of retired or semiretired people who want opportunities to use their skills to become change agents, problem solvers, and community builders. Yet virtually every community has large numbers of older members who are underengaged. Many of these people face real obstacles. In fact, the most significant barriers that constrain older adults’ civic engagement encompass many of the same issues that affect other segments of our communities: • • • •

Health issues, including the need to ensure affordable insurance coverage Transportation and safety Family obligations, such as caregiving or foster parenting Financial concerns, such as the need to supplement fixed incomes (see sidebar 8-1)

These issues suggest parallels with other segments of our communities: the challenges faced by women in the 1970s and 1980s as they entered the workforce in greater numbers; obstacles that youth and unskilled workers face; and barriers experienced by members of the working class. These similarities include: • The need for flexibility in job function and in scheduling in order to balance work (paid or unpaid) with family obligations. • The need to overcome barriers such as transportation or health insurance.

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SIDEBAR 8-1. THE POVERTY BARRIER Although most communities include rich and poor, the poverty rate among older adults in New York City is twice the national average, according to research compiled by the New York Community Trust. More than one in five New Yorkers over the age of 65 lives below the poverty line; older New Yorkers are half as likely as their counterparts elsewhere to own their home. For these people, financial considerations are very real. Giving their time without pay may simply not be an option. A number of people interviewed in New York expressed concern about the emerging discourse on older adult civic engagement—one which emphasizes well-educated, middle-class, healthy people who ‘‘give back’’ during their retirement years. For some, the most pressing need is not to be connected with volunteer opportunities but to access training that will enable them to remain in the workforce as long as possible. These older adults are willing and able to ‘‘contribute,’’ but will need some form of pay or stipend to survive.

• The perception among employers that this population is less reliable due to family obligations or health considerations. • The perception that this population is less qualified because their life experience needs to be ‘‘translated’’ into their new work environments. • The need for training and other programs to help integrate this population into the work environment or culture and to offer this population opportunities for personal and professional growth.

Often the most basic barrier experienced by older adults is a lack of information. Most older adults say they just don’t know where to go to get more involved. Civic engagement opportunities need to be better articulated and publicized. Even in communities where there are plentiful sources of information to connect older people with civic engagement needs, the challenge of matching volunteers or workers with appropriate opportunities remains problematic. ONE SIZE DOES NOT FIT ALL They may share a loosely defined age bracket, but older adults otherwise have the same multitude of personal characteristics, perspectives, and circumstances that present opportunities and complications for any project that is truly community-wide. What this population wants and needs varies. The resources they are able to access vary. The ways service providers, governments, or employers might engage them are equally varied. It is especially important to recognize sociocultural distinctions, many of which are primary to individual identity, or at least more defining than an arbitrary age bracket. Civic engagement may look different from the outside and will almost certainly be experienced differently from within immigrant

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or ethnic communities (see sidebar 8-2). For some, religion- and faith-based institutions are at the core of civic identity. Family structures and gender roles diverge widely and impact the issue of civic engagement. Even sociopolitical histories, such as the shared sense of isolation or scorn felt by many older gay, lesbian, bisexual, and transgender adults, can shape the ways people engage with their wider communities. About one-quarter of the CEP’s projects deliberately explored distinctions such as ethnicity, sexual orientation, or gender. Yet even in projects where this was not an express research objective, these differences emerged organically: in focus groups, where men sometimes struggled to enter into a discussion about ‘‘giving to the community’’; in surveys where white respondents related to the term boomer but Latino respondents said their experience was not reflected in this label; in informal discussions with refugees who did not recognize the help they give to sick or frail neighbors as a form of ‘‘civic engagement.’’ Socioeconomic factors lead to major distinctions within the population of older adults. Many of the issues uncovered in the research are tied to class (which itself reflects factors such as race, ethnicity, national origin, or

SIDEBAR 8-2. MULTICULTURAL DIMENSIONS OF CIVIC ENGAGEMENT The Los Angeles–based California Community Foundation set out to learn how civic traditions from the home countries of immigrants affect their participation in the civic life of L.A. communities. Through interviews and focus groups, they explored a wide range of experiences of non-U.S-born older adults, generating findings from communities with ties to Mexico, Korea, China, Hong Kong, Taiwan, Thailand, Japan, Cambodia, Tonga, and the Philippines. Major findings included the prevalence of informal volunteerism (often focused on extended family or neighbors); the significance of social networks (versus institutions) as a driver of community involvement; and a major role for religious structures in transmitting social values and translating them into action. Gender differences were acute among some immigrant groups, where women’s traditional role as caregivers accentuates the distinction. The primacy of family was identified as a potential value that might be built on and expanded to develop a broader understanding of civic engagement among immigrants. The New York Community Trust had similar findings. Its research into the unique issues of older immigrants also revealed a heightened concern with respect to being engaged in any type of ‘‘formal’’ activity to influence public policy. Cultural differences are not limited to groups of differing national origin. The Baltimore Community Foundation, for example, found race, class, and faith background to be factors strongly influencing older Baltimoreans’ relationship to community engagement. African American respondents tended to view their community engagement activities in terms of ‘‘community service’’ or as a manifestation of the tenets of their faith traditions, while white, largely affluent respondents related to the idea of ‘‘volunteerism.’’

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geography). Gender differences also reflect economic realities: for some older men, their sense of self-worth is tied to professional careers where status was reflected by salary. The notion of engaging with community for little or no pay is at odds with their lifelong identities—a fact that may explain why in some of the CEP’s communities women volunteers outnumber men by a factor of more than four-to-one. Most critical, it is vital to distinguish ‘‘younger older adults’’ (early retirees or those nearing retirement age; roughly ages 50–65) from those who are over 65 and especially those who are over 75 or 80. How a community chooses to segment its population of older adults depends largely on how it understands its challenges and opportunities and what its objectives are in addressing the issue of civic engagement. These choices, however, drive dramatically different findings and inform correspondingly varied strategies. Based on the research, boomers—the group whose oldest members are just now entering their 60s—tend to have an interest in community problem solving. They have a strong sense of their skills and want to find meaningful ways to apply their experience and get results. In some communities, they have a high interest in advocacy, social justice, or other specific issue areas. This is the group most accurately captured by the motto adopted by the Community Experience Partnership: ‘‘In the ’60s, they changed the world. In their 60s, they just may do it again.’’ The oldest adults studied by the CEP—those in their 80s—have different motivations for engaging with community. They seek social contact for companionship and look at work, lifelong learning, and volunteerism as ways to maintain their physical health and mental vitality. Truly a different generation than the boomers, the oldest members of our communities came of age in an earlier time and have different expectations for their ‘‘golden years.’’ They also have more of the complications associated with advanced age and are more likely to be frail and on fixed incomes. Fifteen years from now, as the first boomers are reaching their 80s, these concerns may be as relevant. Our communities’ older adults are as rich in their diversity as our young people and those in middle age. Their passions and fears, their physical, intellectual, and spiritual needs, their abilities and limitations are all impossible to reduce to a single set of statistics or descriptors. Ultimately, it is this diversity that makes older adults such a valuable resource and is why the goal of deepening older adult civic engagement is so promising. A QUALITY-OF-LIFE ISSUE Decades from now, when social scientists and historians have the opportunity to look back at these early years of the twenty-first century, we will have a clearer understanding of the demographic shifts that our communities have gone through, as well as the impacts of those changes. Today, we know simply that demographic change is a fact, and that many of society’s

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existing structures must be modified in response. There is no clear remedy for the challenges we are facing. Indeed, there is no single, defined set of challenges. On a national basis, Americans are aging. Yet each community is experiencing its aging differently. There are common trends, but also highly unique circumstances. Not every community is actually aging. Some communities are aging organically, while others are witnessing influxes of retirees—a distinction some refer to as ‘‘from here’’ versus ‘‘come here’’ (see sidebar 8-3). Some areas are predominantly older on a seasonal basis. And aging is but one of many critical demographic and social trends at play in our communities. We have ethnic and immigrant groups with older members, many of whom do not speak English or have distinct cultural traditions. Economic shifts leave some regions not only older but dramatically poorer. Highly educated adults or those who have retired from skilled professions face a very different set of circumstances than those with workingclass backgrounds or who worked exclusively in the home. By reframing our society’s discourse about aging, placing the issue within the broader context of the public good, and recognizing that the coming boomer wave is in fact an abundant and deeply valuable resource, the philanthropic sector will impact quality of life not just for older Americans, but for all Americans. Foundations are uniquely positioned as catalysts to bring about change in society, so that the structures and supports are put in place to enable the full and productive contributions of older adults. Philanthropy can do this by raising consciousness, by convening key stakeholders, by scoping and commissioning research to get a base of evidence on which to act, by giving grants to develop models and demonstrate successes, and by promoting sound public policy choices. At a time when community needs have never been greater nor more complex, mobilizing our older adult

SIDEBAR 8-3. THE EDUCATED RETIREE The Maine Community Foundation’s research describes a wave of in-migration of educated retirees as a ‘‘windfall of talent.’’ Through the 1990s, Maine followed the rural New England pattern of net out-migration of people to the South and West. Beginning in 2000, however, the trend reversed, and through 2004 the state welcomed new arrivals at a rate of more than 6 percent per year, many with high education levels. Today, Maine’s over-65 population is 50 percent more likely than its under-65 population to have continued their education beyond four-year degrees. Many of Maine’s coming generation of retirees have the financial capacity and disposition to have long, productive retirement years. The challenge is to engage these community members. As many as one in five Maine seniors report being willing to boost their commitment to volunteering—if opportunities were more accessible and better structured for their needs and abilities.

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population on behalf of the civic good is of the utmost urgency. This is the right thing to do for our older adults, and the right thing to do for our communities. REFERENCES Foundation Center. 2007. Foundation growth and giving estimates. New York: Foundation Center. Freedman, M. 2007. Encore: Finding work that matters in the second half of life. New York: Public Affairs. Weiner, A. S., and J. R. Solomon. 2007. Historical overview of philanthropy and aging. Generations 31 (2): 12–16.

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Evaluating Images of Aging in Print and Broadcast Media MARIA D. VESPERI

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geism in media has many causes, but its cumulative effect has been to restrict and impoverish public dialogue about the increasing presence of older people in twenty-first-century communities. This chapter examines how entertainment and news media reflect public policy and marketing concerns to influence the category ‘‘old age’’ as baby boomers strain at its boundary. Decreased attention to aging as a social welfare issue is found to correlate with popular emphasis on healthy, active seniors who boast stock portfolios and independent lifestyles. As the healthy/wealthy image continues to supplant other models of successful aging, less affluent elders may experience new levels of social and economic disenfranchisement. In contrast, images of affluent and middle-class retirees are increasingly identified with models of late life based on private entitlement and freedom from civic ties. At this juncture, it remains unclear whether aging boomers will be viewed as mentors with time and experience to share or as selfish consumers who are draining the legacy of future generations. Advertisers who traditionally ignored the ‘‘49-plus’’ demographic have begun to see age-related topics as lucrative but potentially dangerous ground. Marketing experts predict that future discretionary spending will be controlled by older, healthier, more demanding consumers who are already sensitive to stereotypes and prepared to resist them. Negative portrayals of aging in media have reportedly declined as images of older people are

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decoupled from stereotypical settings and products, suggesting that changing cultural values are combining with the demographic weight of the babyboom generation to force a gradual but profound retreat from conventional, largely negative expectations about social and physical aging. The relative absence of older characters in both broadcast programming and advertising remains consistent, however, with white males the most visible and minority elders the least. The effects of this invisibility have unquestionably been damaging. As communications specialist George Gerbner eloquently puts it: Representation is, of course, not just a question of numbers or of fidelity to census figures. It is a question of the variety of roles, opportunities, life chances, and images most people see in common from infancy on and as they grow old. Those underrepresented in the world of television are necessarily more stereotyped and limited. Visibility is privilege in the symbolic world. (1993, 214)

The aging of the diverse and yet highly self-conscious baby-boom generation offers new opportunities to fill this symbolic void. Boomers are the first generation to take television for granted; their realities have always been ‘‘mediated.’’ Life experience and exposure to what British cultural theorist Dick Hebdige (1994) calls ‘‘aspirational cluster’’ marketing could further accelerate the ongoing identity-construction process among people who have reached age 49—the upper threshold for mainstream marketing—with the unchallenged expectation that most commercial programming will be aimed at them. As Don Bradley and Charles Longino point out, ‘‘Old age is a moving target’’ (2001, 17). More than three decades of research on all aspects of media and aging have generated many hypotheses but no unified evidence of a simple, causeand-effect link between televised or print images and attitudes about old age. In this chapter, I will touch on three interrelated elements in the construction of contemporary imagery: the shifting political-economic landscape of aging in the United States; the commodification of aging in print and broadcast media; and the production of news about aging as influenced by the graying of the journalism industry and audience. IMAGES OF DEPENDENCE AND FRAILTY The rarely challenged assumption that youth and age are celebrated at each other’s expense is more a feature of the ‘‘either/or’’ model applied to many issues in the United States than evidence of any universal principle. Images of elders making way for the young are linked closely to capitalist patterns of production and consumption. In contrast, cross-cultural studies demonstrate that appreciation of youth can coexist quite productively with high respect for the skills, knowledge, and individual attributes of older people.

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Kinship terms and ritual behaviors codify informal, affectionate relations between young and old in many cultures; at the same time, tensions between both groups and the middle generation are reflected in more formal names and behavioral rules. The anthropological literature on aging offers many relevant examples; see particularly the collections edited by Makoni and Stroeken (2002); Sokolovsky and Shenk (2001); Markson and Hollis-Sawyer (2000); Sokolovsky (1997); Albert and Cattell (1994) and the study by Keith et al. (1994). In Great Britain as well, research does not uniformly support the popular assumption that ‘‘youth culture’’ imagery is linked with animosity toward the aged. A 1998 content analysis of British prime-time television conducted for the BBC and the group Age Concern found instead that ‘‘40–59 year olds were the least positive and most negative towards older people’’ (1998, 20). Even in the United States, Dial (1988) noted more positive portrayals for older than for middle-aged adults, although Woolf (1998b) cautions that the content-specific nature of Dial’s sample, ‘‘family-oriented prime time,’’ may be significant. The first large-scale study of social aging relied on the notion that nurture balances nature in defining what it means to be old. Working from the Human Relations Area Files to develop a list of more than a hundred cultural variables, Leo Simmons (1945) reinforced the theoretical assumption that social identities are constructed by a unique confluence of discrete but interrelated factors such as kinship and subsistence patterns, health status, and participation in ritual and secular life. His book, The Role of the Aged in Primitive Society, came near the midpoint of a century that had been marked to date by public efforts to define and solidify old age as a fixed biosocial and economic category (Blaikie 1999). After decades of confusion about where elders might fit in a mobile, rapidly urbanizing society, the full outlines of retirement and social welfare blueprints established during the Great Depression were beginning to take shape. As young adults filled the workforce and the suburbs after World War II, the guarantee of steady, if modest, retirement incomes paved the way for the Sun Belt migration and for the establishment of the nursing home industry. Ironically, at the moment when social scientists were exploring the idea that biological and social aging were interdependent, widely variable across cultures, and hence malleable, U.S. society at large was becoming fully socialized to the belief that chronology is destiny. The assumed inevitability of frailty, role loss, and senility, combined with new patterns of age-based residential segregation for elders and young families alike, left few incentives to resist stereotyped images of retirees as frail and disengaged. Robert Butler (1969) focused on the negative impact of housing segregation in ‘‘Age-ism: Another Form of Bigotry,’’ an article that is widely credited with introducing the term ageism to public consciousness.

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Over time, the popular belief in a fixed, nonarbitrary relationship between age and social performance hardened into rigidly calibrated expectations and abrupt dismissal of productive citizens from the workplace. As forced retirement and Social Security made older people a more economically and socially predictable group, negative perceptions were elevated from the level of synecdochic characters in literature and film to gross stereotyping. Medicare and the community-based programs created under the Older Americans Act of 1965 can be viewed as further responses to the cultural construction of old age as a discrete social category marked by frailty and dependence. The federal strategy of limiting social welfare initiatives to ‘‘problem’’ groups such as the elderly and the poor had the unfortunate effect of confining even well-meaning public dialogue to negative issues, and, as Frances Fox Piven and Richard Cloward (1993) have long pointed out, regulating discontent rather than addressing the underlying issues. Reviewing presentations of aging on television from a mid-1980s vantage point, R. H. Davis and J. A. Davis remark that ‘‘the usual public affairs special about old people in the community is likely to focus on the visible elderly who have multiple health losses’’ (1985, 49). Not surprisingly, polls conducted during the 1970s and 1980s found people believing that a majority of elders were or inevitably would be confined to nursing homes, even though the actual figure has held steady at about 5 percent. The U.S. identification of seniors as actually or potentially ‘‘unwell’’ led to a focus on old age as burdensome, rather than to a reexamination of health policies for all citizens. The public affairs spotlight on health problems did not hold true for fictional portrayals of aging at the time, however, nor does it today. With regard to entertainment programming, Davis and Davis cite studies that found ‘‘over 90 percent of the older characters were in remarkably good health. It is those characters between ages 22 and 45 who have the most health problems’’ (1985, 49). The more recent study of British television conducted by the BBC and Age Concern indicates that 50 percent of fictional characters age 60 and older are portrayed as ‘‘economically active’’ and that disability is portrayed in only 2 percent of older people (Evers 1998, 20). Evers notes: ‘‘While by and large the under representation of older people may be a matter of concern, the evidence for discriminatory treatment overall is somewhat sparse (Evers 1998, 20; also Blaikie 1999, 97). The advent of television and mass marketing contributed significantly to the promulgation and refinement of negative stereotypes, but studies that place primary blame on the media for generating negative attitudes overlook the very complex interplay of factors that work to stigmatize and marginalize the aged. It is critically important to address the ever-shifting interplay between the perceived socioeconomic status of older people and images of aging in entertainment, advertising, and news media.

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IMAGES OF ROBUST CONSUMPTION ‘‘Why don’t we see ads featuring older people wearing cool clothes, driving new cars, buying the latest electronic gadget?’’ asked Pam Kelly of the Charlotte Observer in a 2002 column. Now that baby boomers are edging toward retirement, there is a demographic near-certainty that we will. Global Information/The-infoshop.com, a merchandiser of market research firm reports, offers numerous studies that provide a wealth of information for niche marketers. In the report Baby Boomers and the U.S. Food and Beverage Industry: Trends and Opportunities in Health, Natural and Organic, Gourmet, Ethnic and Convenience Foods (Packaged Facts 2005), one can find a figure illustrating ‘‘The Epicurean Baby Boomer by Age Segment, 2004 (percent): Specific Products Draw Specific Boomer Segments.’’ The U.S. Baby Boomer Market: From the Beatles to Botox (Packaged Facts 2002), an exhaustive proprietary study that has been updated through several editions, offers a whole section on ‘‘Boomers and Automobiles’’; subheadings include ‘‘Boomers Developing a Sweet Tooth for ‘Road Candy,’’’ ‘‘Boomers ‘Age’ the Motorcycle Population,’’ and ‘‘Boomer-Geared Cars Will Accommodate Aging.’’ Sanctions concerning ‘‘age-appropriate’’ hairstyles, dress, demeanor, and recreational behavior loosened considerably as postmodern approaches to identity construction began to challenge the very notion of ‘‘natural’’ aging. In the twenty-first century, a trim, smooth-skinned retiree on a racing bike is viewed as an aspirational model, not an oddity. And the postmodern makeover is certainly not confined to physical aging. In a straightforward article on marketing for ‘‘generations older than the baby boomers,’’ Gilmartin (2003) urges attention to ‘‘personal growth’’ and ‘‘revitalization.’’ In an ethnographic study of twenty-six individuals from preretirement through the early retirement years, Savishinsky (2000) documents examples of new civic engagement, creativity, and the blossoming of avocations. The popularity of Elderhostel programs and the opening of public university classrooms to auditors over age 60 are further indicators that today’s retirees remain eager for social and intellectual change. Self-styled boomer trend guru Ken Dychtwald urges marketplace attention to ‘‘five key factors that will reshape supply and demand’’ for a new generation of retirees. Among them: ‘‘A psychological shift from acquiring more material possessions toward a desire to purchase enjoyable and satisfying experiences’’ (Age Wave 2003). The contents outline for U.S. Baby Boomer Market: From the Beatles to Botox notes an appetite for adventure travel; related entries include ‘‘Boomers Fuel Growth in Travel Industry’’ and ‘‘Over 50 Travelers Spend More, Stay Longer’’ (Infoshop 2002). Boomer interest in second careers, education, and self-actualization movements has already become ubiquitous. In a curious twist on the culture traits model, the marketplace is enabling the leading edge of the baby boom to resist imposed categories and instead continue a lifelong pattern of culturally sanctioned

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self-creation through individualized consumption of goods, services, and experiences. At the same time, the cry for equal time that often dominates discussions of ageism in advertising and entertainment reveals a negative bias about the potential of late life to ‘‘mean’’ anything desirable in its own terms. The cultural construction of old age as a space and time of deficit, reduction, and loss is reflected in traditional efforts to shape the consumption patterns of older people. Advertisers draw transparently on claims to restore, replace, or retain youthful attributes, or conversely to mask, suppress, or erase evidence of the aging process. Such marketing locates desire in a kind of temporal regression, often symbolized by dehistoricized montages of imagery and music. Some observers have questioned whether the ability to fight physical aging with expensive hormones, cosmetic procedures, and obsessive exercise will eventually be regarded as a duty, hence reinforcing current biases rather than fostering a new acceptance of the aging process (Blaikie 1999). Positive images of aging bodies are rarely presented as ‘‘natural’’ in the here-and-now. Instead, past becomes present through the restorative powers of prescription medications that enable elders to stick around for a mother/daughter mall fest or a multigenerational stroll on the beach. Here the focus is on function, safety, and control—a latter-day static equilibrium model. This shift has been reflected in recent efforts by advertisers and feature writers to facilitate or even celebrate age-related transitions such as the movement of the baby boomers from midlife to retirement. Interestingly, however, these new images have not been inscribed on the body. Instead, some advertisers have begun to exploit the once-taboo concept of change by relocating the aging body to an imagined future where the locus of desire is transferred from persons to personal purchasing power. Wise investments today yield a beach house tomorrow; a fulfilled lifetime flashes before the eyes of a man with the right credit card in his wallet. Journalists, too, have focused largely on boomers as major consumers of housing, health care, and leisure services. NOW YOU SEE THEM, NOW YOU DON’T Studies of media and aging published in professional journals during the 1970s established at least two general findings that remain consistent today: Content analyses have consistently reinforced that people over age 60 or 65 are greatly underrepresented in broadcast media and that the problem is notably worse for female characters, who may be cast in ‘‘senior’’ roles at much earlier ages than male characters (Signorielli and Bacue 1999; Gerbner 1993). Despite the low numbers, however, reports about the images associated with elderly characters began to shift markedly in the mid-1980s. Austin (1985) tested the cultural climate with a study of 144 college students;

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she found that attitudes toward old age were more positive than those found by previous researchers. By 1988, Dial was reporting favorable portrayals of older people in her sample of twelve prime-time, ‘‘family-oriented’’ programs. Evers (1998, 9) points to an important mid-1980s change in how age categories are popularly defined, with ‘‘retired 65-plus’’ becoming ‘‘older 55-plus.’’ This shift reflects several trends, including the corporate strategy of offering early-retirement incentives and the much-publicized displacement of older executives by consolidations and takeovers. Popular media began to devote attention to the midlife male; cosmetic procedures gained new acceptance for men in pursuit of second careers. At the same time, employed middle-aged people were at the peak of their earning power; some were benefiting also from the generational transfer of resources through inheritance. Housing values rose in some regions, boosting equity for midlife homeowners and foreshadowing the nationwide escalation of equity experienced by boomers in subsequent years. Affluent and middle-class folk over age 55 were actively courted by retirement communities, which offered an aspirational model of late life based entirely on private entitlement. The symbolic vehicles for marketing this new ‘‘wannabe’’ cluster were images of white, athletic, heterosexual couples of indeterminate age enjoying active lifestyles in the safety of gated environments (Vesperi 2001; see also Low 2001). Overall, content analyses conducted from the mid-1970s to the early 1990s provide a chronological record of televised images of aging that roughly parallels a significant restructuring of public and private expectations. The Reagan-Bush era heralded an ongoing shift away from the emphasis on aging as a social welfare problem and toward a focus on healthy, active seniors with stock portfolios and independent lifestyles. ‘‘I do not want my children to grow up in an isolated neighborhood, knowing neither the realities of old age nor the meaning of racial heterogeneity,’’ wrote Butler in 1969. Age-segregated housing, then the refuge of the elderly poor, was increasingly touted as an upscale choice for healthy retirees who could buy ‘‘freedom’’ from familial and civic ties. This reconstruction of what it means to be old conflicted sharply with traditional images of both the frail, disengaged old codgers and the benign elders who retained roles and responsibilities within the family. By the mid-1990s, aging had moved beyond the academic arena to become an issue of concern for media and advertising professionals. Sponsors for a 1995 ‘‘Images of Aging’’ conference held at the University of California, Los Angeles, included CBS and the Academy of Television Arts and Sciences. That same year, the leading edge of the boomer wave moved to the brink of the ‘‘golden demographic,’’ television viewers ages 18–49. Defining elderly as individuals who appeared to be 65 or older and adults as those aged 18–64, Tupper (1995) produced a content analysis of 278

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commercial spots aired on Fox, CBS, NBC, and ABC during sixty prime-time hours in November 1994. She found that 15 percent of the 278 spots included elderly people. Male characters were overrepresented in her sample (thirty-nine males vs. twenty-nine female characters), but both men and women were grossly underrepresented in proportion to their presence in the U.S. population. Ethnic diversity was almost nonexistent. Only one of the sixty-eight elderly characters was African American, one was assumed to be ‘‘Hispanic,’’ and two others were coded as ‘‘visible minority.’’ The lack of diversity is consistent with more recent research on magazine advertising (de Luce 2001; Bramlett-Solomon and Wilson 1989; see also Kilbourne 1999). Tupper’s findings are particularly interesting with regard to the settings where older characters appeared. Forty percent of the ads featured elders in professional/corporate/retail settings; only 2 percent depicted them in health care settings. There was no significant association of aged consumers with frailty. Instead, Tupper notes, television advertising would suggest that ‘‘the predominant health concerns facing elderly consumers are malnutrition, headaches and colds.’’ Typically, she found more sins of omission than anything else: No clear cut, definitive negative stereotypes of elderly people emerged from this study; in fact, elderly characters did not appear in the anticipated commercial categories . . . roles for products such as arthritis medication, denture care products, or skin wrinkle creams, nor did they appear in sick, weak, fragile, or absent-minded roles. (1995)

Tupper concludes: ‘‘Advertisers may have taken the cue from published research and made an obvious effort to avoid perpetuating the sick, weak old person stereotype. However, the effect of this has been to reduce the overall opportunities for visibility of elderly characters.’’ While her work on the representation of elderly people in prime-time advertising does not support common assumptions about age-stereotyped products, it does strongly suggest that advertisers simply sidestepped the challenge of developing ageintegrated marketing campaigns. In another sample from 1994, Roy and Harwood (1997) analyzed 778 commercials looking for ‘‘older adult characters,’’ this time defined as individuals 60 and older. Their viewing time was 5:30–10:30 p.m., a deviation from the 8:00–11:00 p.m. prime-time viewing window that is typically cited. The difference is potentially significant because their sample encompassed the evening news hours, when older audiences are particularly loyal. Like Tupper, however, Roy and Harwood found that older adult males were underrepresented and that the lack of representation was particularly striking for women and minorities. Signorielli found that ‘‘minority characters on television tended to be cast in younger roles than whites’’ during the 1990s (2001, 36).

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Bell (1992) studied prime-time programming during the 1989 season, focusing on five shows that featured older characters in major roles. She concluded that the images of aging presented by these leading characters were positive ones. Signorielli and Bacue’s 1999 study of three decades of television programming reveals that the number of elderly characters has remained at a constant low of 3 percent for prime-time drama. The percentages of older characters in all recent studies remain very small, despite fewer reports of negative stereotyping in the imagery itself. What this broad range of findings means is another matter. At times, it is difficult to pinpoint where change has been most significant—in the messages offered by mass media or in the theoretical perspectives of those reporting the data. An eye-of-the-beholder problem inherent in this literature makes it difficult to summarize; there are many interesting intellectual exercises, but they do not always indicate how contemporary characters have been developed or received. For example, analysts are nearly united in disparaging the presence of elders in situation comedies; the positive attributes of humor are rarely mentioned. Many researchers are heavily invested in the content analysis method; self-reflection is uncommon when it comes to the construction of categories or the application of analytical models. Therefore, it is both refreshing and significant that Tupper notes ‘‘the difficulty of establishing objective criteria by which to judge negative, neutral and positive representations’’; see also Davis and Davis 1985). Woolf’s review of the literature on aging in media leads her to conclude cautiously that ‘‘television has tended to present an unrealistic picture of the older adult.’’ She stresses that the studies are contradictory, however, and notes that unrealistic representations may not necessarily result in the adoption of ageist attitudes by viewers. Passeth and Cook, for example, propose that television viewing has a small impact on knowledge of and attitudes about aging, and effects are primarily restricted to younger people. (1998b)

Researchers are quite radically divided about the impact of popular imagery on children and on older people themselves. In a separate critique, Woolf points to several methodological flaws that make the work contradictory and confusing, such as a ‘‘mono-method bias,’’ foregrounding age as a topic in subjects’ minds, and relying solely on younger subjects (Woolf 2003). IN THEIR OWN IMAGE Another problem is the propensity to regard correlation as cause and effect, particularly when media sources can conveniently be held harmful. For instance, in a long-term study of self-image among older people published

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in the Journal of Personality and Social Psychology, researchers found a strong correlation between positive self-perceptions and longevity (Levy et al. 2002). Testimony on the study before the Senate Special Committee on Aging contributed to news leads such as this one from the Holland Sentinel (2002): Television ads depicting aging baby boomers as ‘‘greedy geezers’’ and news stories calling older audiences ‘‘a bad omen for advertising revenues’’ pose serious risks for the elderly and may even shorten life span, a panel of experts on aging testified Wednesday.

Becca Levy, a Yale University epidemiologist who coauthored the journal article, gave Senate testimony on the topic and explained that although the prevalence of negative images of aging is not entirely due to the media and marketing, they seem to be the sources that are the most pervasive, identifiable, systematic, and profit-driven. Extolling youth while demeaning the old helps to generate images that, as our research suggests, may have devastating consequences. (Senate Special Committee on Aging 2002a)

Levy’s study did not actually include observation of television viewing habits, however. ‘‘Seem to’’ and ‘‘may’’ are operative terms here. Ethnographic studies of late life show that self-image is fashioned from many diverse elements. While older people are certainly sensitive to cultural expectations, contacts with family and friends are key in constructing a positive sense of self. In a small but closely observed sample of Maine elders in a rural setting, Natalie Rosel found that her research subjects were active agents in constructing their own identities, not hapless victims of media stereotypes. While many lived alone without transportation, they drew strength and support from ongoing social networks and expressed pride in their unique local knowledge. Rosel suggests that media images . . . have stiff competition for the attention of individuals so thoroughly attentive to the everyday world around them. Of course, these elders take note of images of older people in the media, especially if there is a local frame of reference or familiar landscape. But real people, known age peers, provide the important models for identification when it comes to aging (or surviving) in place. (2001, 50–51)

Working with a very different sample of elders ‘‘aging in place’’ in New York City, Freidenberg (2000) found health, social connections, income concerns, and safety to be central in defining the meaning of old age for her informants. Neuman, Just, and Crigler (1992) found that news consumers in general were active participants in framing political information: ‘‘It soon

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becomes clear that in their active interpretation of the political world, audience members alternatively accept, ignore, and reinterpret the dominant frames offered by the media’’ (quoted in Campbell 2000, 7). A review of recent literature led Bradley and Longino (2001) to suggest that older people do not relate positively to product categories that reflect their chronological ages (see also Gunter 1998). These authors raise the idea that simply increasing the representation of older people in advertising (older models, or even older role models) might not have the intended effect. They point to marketing strategies that urge advertisers to use models ten to fifteen years younger than the target audience because some researchers suggest that ‘‘many elders, especially those who are healthy and active, perceive themselves to be 75 to 80 percent of their actual chronological age’’ (Bradley and Longino 2001, 20). Bradley and Longino also identify several surveys (Shavitt, Lowery, and Haefner 1998; Mochis 1994; Speer 1993) that found older people actively dissatisfied with marketing efforts. In one study, almost a third of respondents over age 55 reported boycotting products because of perceived age or youth stereotyping: Mochis [1994] also found evidence to suggest that the percentage taking offense at age stereotypes may be especially high among people age 75 to 84 and among those who are healthy, wealthy and active—that is, among those in the prime senior target market. (Bradley and Longino 2001, 19)

If current retirees do not really conform to the stereotype that they are passive consumers of mass communications, it is reasonable to assume that aging boomers will display even more agency in the information and entertainment marketplace. What will happen when a majority of boomers—not just the leading edge—exceed the boundaries of the traditionally targeted 18–49 marketing category? Dychtwald predicts that demography ‘‘will shift the ‘epi-center’ of consumer activity from an exclusive focus on youth, to the need[s], challenges and aspirations of middle-aged or mature consumers’’ (Age Wave 2003). A 2002 press release from Corbis, a proprietary-image giant that maintains an inventory of some 65 million pictures, demonstrates that a move to ‘‘shift the epicenter’’ is already well under way. The release advertises Corbis’s ‘‘46/64’’ image catalogue, a marketing tool that ‘‘places older Americans in the commercial picture.’’ How? Filled with rich, compelling photography, 46/64 captures 38- to 56-year-olds in fresh and unexpected settings and styles while celebrating the essence of this unique group. Divided into the sections ‘‘Mind,’’ ‘‘Body,’’ ‘‘Heart’’ and ‘‘Soul,’’ the pictures in 46/64 help creative professionals find the right image for their needs, and to express their vision. (Corbis 2002)

The photos offered for sale are said to reflect market-researched ‘‘trends and topics’’ that in turn reflect the ‘‘values’’ of boomers. For example, the ‘‘new

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reality of graceful aging with a youthful, energetic look’’ is said to reflect the finding that this age group ‘‘is still working, learning and active.’’ The catalogue ‘‘portrays . . . individualism, personality, confidence and rebellion,’’ reflecting the idea that boomers ‘‘break the rules, question tradition and authority.’’ While these associations are at least as cliched as the ones they promise to replace, a third observation may be worth noting: ‘‘This group was the first to move from their hometowns, change their social class and challenge aging. 46/64 addresses these milestones with imagery of intelligent people redefining concepts like beauty, aging, success and freedom.’’ Leinweber (2001) describes how the process of pairing images with ‘‘key values’’ is also being promoted for the ‘‘older adult market.’’ Advertisers may be stocking up on ‘‘meaningful’’ images of mature adults, but their presence in the media market remains negligible. Judith de Luce cast a wide net in 2001 with a content survey of attention to consumers ages 50 and older in advertising and articles from thirty-one popular magazines. She found four substantive articles that addressed aging, including a fashion spread in Vogue. However, with the exception of Prevention, a health magazine, and the two business-oriented publications Forbes and Fortune, which featured older white men, models over the age of 50 did not have significant presence in the magazines’ ads (de Luce 2001, 40, 42). De Luce observed: If we were to draw a picture of American life exclusively from evidence derived from these thirty-one magazines, we would have to conclude that the consuming population consists primarily of people 18 to 49 years old. We would also have to conclude that there are almost no people of color in the United States. (2001, 41)

WHEN AGE MAKES NEWS Despite the enormous literature on journalism, studies of aging in both print and broadcast news are relatively sparse when compared with work on entertainment or advertising. Some findings are similar across news and entertainment platforms, particularly the underrepresentation of people in the 65-and-older category (Evers 1998, 14). A study of the topic in the United Kingdom for the United Nations International Year of Older Persons in 1999 found that older people and their issues were not neglected, although stories still focused on frailty and victimization (cited in Bergstrom 2001, 30). These topics are still prevalent in U.S. newspapers. However, they have been tempered by a public policy shift that deemphasizes social welfare issues—even in the face of continuing need—and by the growth of the ‘‘aging beat’’ as a journalism specialty. As mentioned above, the high levels of public outrage and government receptivity to change that led to Medicare, Medicaid, and community-based services were unfortunately paired with a perception of the elderly as frail victims. In a climate of decentralization and

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privatization, however, retirees are perceived as less needy and more greedy (see Torres-Gil 1992). Writing on the topic of ‘‘geezer-bashing’’ for the online publication Extra! in 1991, John Hess sounded an early alarm about the media’s tendency to blame old folks and their entitlements for everything from infant malnutrition to the savings-and-loan crisis (Hess 1991). Danish journalist Hans Bergstrom put it well when he tagged the problem to ‘‘a media tendency of living in a symbiotic relationship with political actors framing a problem in familiar terms, as well as variations on the more general ‘feel good’ factor in society’’ (2001, 24). Looking at print and broadcast news coverage of health care policy for the years 1997–2000, researchers for the Kaiser Family Foundation found that coverage of issues deemed relevant to the elderly rose in relation to the upcoming presidential election: ‘‘Seniors vote in large numbers, so the candidates talked a lot about the health issues seniors care about most. And when they did, the news media covered the story’’ (2002, 2). The researchers’ report continued: That the changes in the topics covered seemed to so closely follow what was in the spotlight in the Congress and in election campaigns suggests that, when it comes to health policy, the news media was more likely to be ‘‘following’’ than ‘‘leading’’ the national agenda. (Kaiser Family Foundation 2002, 4)

Official pronouncements and ‘‘expert’’ knowledge frame and inform news coverage, often signaling the difference between ‘‘serious’’ and ‘‘sensational.’’ For example, demographic pronouncements on the graying of the population are considered serious news, while social scientific studies about latelife engagement are often regarded as fodder for quirky features at best. Acutely aware that inadequate or novel framing can overwhelm credible content, journalists are often reluctant to stray from the familiar. Addressing the topic of frames in an article on writing and reporting, veteran journalist Cole Campbell stated: ‘‘The biggest frames—worldviews, belief systems, personal definitions of ‘THE Truth’—can be so pervasive and persuasive that everything you encounter you see through that frame. That makes it hard to consider other frames of reference, other ‘Truths’’’ (2000, 6). Campbell pointed out that frames ‘‘are sometimes as simple as metaphors, sometimes as complex as analogies’’ (2000, 5). Telling a new story about aging requires new metaphors, and that can be risky business. ‘‘Age beat’’ reporters are active reframers, and their specialty is becoming a respected assignment in twenty-first-century news organizations. Paul Kleyman of the American Society on Aging and Aging Today notes that more than seven hundred U.S. and Canadian journalists representing a range of media belong to the Journalists Exchange on Aging, an information network designed to help those who cover this area as a regular beat or in frequent assignments (Kleyman 2001a; U.S. Senate, Special Committee on Aging 2002b).

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Bill Krueger, an investigative reporter for the Raleigh, North Carolina, News and Observer, became interested in the topic of aging while doing a series of articles on nursing homes. Krueger compares work on aging to newspaper coverage of diversity, where a decade of heightened sensitivity has ‘‘changed the face of many newsrooms, and has changed the types of stories that appear in the newspaper.’’ Not so for the elderly, he says. Coverage of aging issues ‘‘runs the risk of reducing our older population to caricatures’’ and fails to provide older and middle-aged readers with ‘‘timely and useful information’’ (Krueger 2001, 11). Krueger finds hope in resources such as the New York–based International Longevity Center USA. An increasingly influential research and policy institute founded by Robert Butler, the center counts ‘‘highlighting older people’s contributions to their families and to society as a whole’’ as part of its mission (for more information about this organization, see www.ilcusa.org). With support from the John S. and James L. Knight Foundation, the center has offered a series of programs for journalists on ‘‘Covering the Longevity Revolution.’’ While more reporters are becoming interested in aging, many news executives resist aiming resources at older or even midlife consumers. Studies document a clear and growing imbalance between the goals of veteran reporters and the management strategies favored by some media executives (Bergstrom 2001). Reporters see opportunity in the ‘‘age wave’’; executives fear disaster. Both groups base their predictions on trade research that definitively documents the graying of the newspaper-reading public. The newspaper reading habit is most deeply ingrained in people who were old enough to track the movement of troops through print coverage during World War II. Yet, current studies indicate that newspaper readers in their 70s—folks who were adolescents in the 1940s—may be turning to television due to eyesight problems. Middle-aged boomers and the ‘‘young-old,’’ readers who collectively span the ages of about 45–74, are most loyal to mainstream newspapers. They are also most willing to read a paper from front to back, browsing through a wide range of content for items of interest. The younger the reader, the more likely he or she is to be impatient with general-interest publications of all kinds. Specialty magazines and Internet sources deliver the goods to young consumers who are fully socialized to niche marketing. Young adults are also comfortable with vertical learning, hunting isolated information in a chain rather than browsing until something catches their eye. The ‘‘buzz’’ is that young readers’ lifelong media exposure favors sound bites over long narratives, concedes Michael Scherer (2002), a Columbia Journalism Review editor. In a balanced treatment of research on trends in magazine reading, Scherer calls into question numerous assumptions that are driving media redesigns aimed at youth, including the belief that young people have short attention spans. Some decision makers, he says, are ‘‘struggling to refocus the terms of the debate and dispel myths, lest advertisers and readers start to believe them’’ (2002, 33).

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It is critically important to look beyond the familiar assumptions that ageism is simply image-driven or that ‘‘the media’’ promote ‘‘youth culture’’ in ways that universally demean and demoralize older people. The highly competitive environment of the information age is driving news executives to make active, conscious decisions about whether to spend money on keeping loyal audiences or reaching out to new ones. For the most part, they see financial crises ahead unless newspapers can be rendered necessary in the lives of young adults. The trend has been to approach this goal by making newspapers bright and shiny, with more graphics, shorter stories, and, some say, an effort to purge the newsroom of middle-aged reporters. Comparable trends can be identified for television. Older viewers are likely to accept established television news formats and to organize their time around watching a program, rather than requiring information and programming to be available on demand. The Internet is structured to provide this; traditional prime-time news broadcasts are not. Writing in the January/February 1998 issue of Columbia Journalism Review, Lawrence K. Grossman, a former president of NBC News and PBS, noted that television advertisers pay well over twice as much to reach viewers in the 18–35 demographic than for those over age 35. Identifying a trend that has deepened sharply in recent years, he identified a ‘‘lightening’’ of newscast content, ‘‘playing down serious reporting about government, international affairs, and major public issues, whose appeal is thought to be confined largely to older viewers.’’ Print and broadcast executives don’t have to fight for the middle-aged; like older consumers, they are already a bird in the hand. Boomers constitute more than 50 percent of newspaper readership in some markets, and they watch the most television, too. Marketing research by the NPD Group found that 45- to 65-year-olds spent nineteen more minutes per day engaged in reading than people in the 24- to 40-year-old group. ‘‘While younger twenty-somethings spent an average of only 24 minutes per day reading, Americans over age 50 clocked nearly twice as much time per day on that activity,’’ NPD marketers summarized. ‘‘This trend, coupled with shifting demographics as Boomers enter middle age, could mean a windfall for publishers’’ (NPD Group 1999). Yet, even when boomers are acknowledged for their collective purchasing power, there are worries about how much time they count as leisure and how they plan to spend it. Some trend watchers fret that the upswing in second-home purchases and travel will prompt boomers to ignore the ad-heavy Sunday paper or cancel it altogether. Writing for Editor and Publisher, Lucia Moses cites this dire warning from demographer Peter Francese: That 55- to 65-year olds will be the fastest growing age group in the next four years sounds good because they’re also among the biggest spenders on

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newspapers. But they’re also the most likely to own second homes where they will spend more weekends out of reach of their hometown paper. (Moses 2003)

In a much-discussed study based on interviews with two hundred news executives at the turn of the millennium, Nancy Hicks Maynard targets middle-aged management as an obstacle to reaching that coveted younger consumer. She minces no words: ‘‘Baby boomers have captured the newsrooms of traditional media, especially print media. These newsroom leaders disdain the learning styles and information-getting habits of younger people. They lack appreciation for a future, growing audience’’ (Maynard 2003; see also Maynard 2000). The fastest-growing audience is not the young, however, a fact that media executives can no longer ignore. Aging Today’s Kleyman, who is widely regarded as the leading journalist on the American age beat, responded to Maynard’s work with a warning about ageist assumptions in the newsroom. He urged decision makers to revisit outmoded marketing strategies, citing a 1995 proprietary study that found ‘‘ageism was a secondary effect of the industry-wide practice of estimating numbers of household units, especially those in which young, June Cleaver-type mothers make family buying decisions, rather than calculating audience size and buying power by per-capita income’’ (2001b). Such a reemphasis, Kleyman explains, would ‘‘place a spotlight on today’s more affluent older audiences, but force advertising agencies to abandon the household unit’’ (2001b). The model offered in Bergstrom’s turn-of-the-century study ‘‘Age in the Press’’ could be applied productively to an analysis of all media industries that rely on advertising revenues. Bergstrom compared both the coverage of agerelated issues and the newsroom as a work environment for middle-aged journalists at several newspapers, with primary focus on his own employer Dagens Nyheter and the Boston Globe. Both newspapers lost circulation during the 1995–2000 period. Against the backdrop of demographic change, which, he notes, ‘‘may be the single most important transformation of our time,’’ Bergstrom examined newspapers as ‘‘organizations,’’ as ‘‘markets,’’ and as ‘‘agenda setters’’ (2001, 2, 7–11). As early as 1998, only 3 percent of newspaper reporters were under age 25. Organizationally, Bergstrom found, newspapers face a crisis similar to the nursing profession, in which an estimated 9 percent of nurses were under 30 years of age in 2000. He notes, ‘‘In their internal organization, the main objective has been to dispose of upper-middle-age employees, irrespective of their expertise, in order to be able to recruit younger people’’ (2002, 37). Bergstrom’s findings are clearly related to trends in broadcast journalism, entertainment media, and advertising. If baby boomers are shaping the media agenda, they are clearly responsible for stereotyping—or outright avoiding—the portrayal of age. The question of who will shape the image of their own social aging is highly significant for the future.

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CONCLUSION While negative stereotypes of frail, penny-pinching retirees have been disincentives to advertisers in the past, a new emphasis on health-conscious boomers with money to spend is no guarantee that their lives will be reflected in positive ways. While new options are beneficial, many people will face serious challenges if the healthy/wealthy image supplants other models of successful aging. While touted as a market opportunity in many quarters, the baby boom has also emerged as a threatening demographic group in discussions of aging. Beyond the obvious issues of cohort size and the resulting strain on health care and Social Security, new issues are beginning to register on the social agenda. Discussions of housing, employment, and consumer spending among aging boomers often emphasize the depletion of resources for younger groups rather than the potential of healthy, well-educated retirees with discretionary incomes to make significant civic contributions. A key question for scholars concerned with the cultural construction of aging is whether boomers truly will break free of existing stereotypes, as many predict, or ultimately reinforce them. Answers will depend on the same infrastructural mix of social policy, economic reality, and public opinion that has generated popular stereotypes about today’s elders. Any effort to prompt new thinking about media responsibility for images of aging requires credible insights that will command attention among practitioners. The research on media imagery is both more and less than a collection of facts, however, and industry professionals encounter a series of stumbling blocks in using it to implement change. First, as noted above, the content analysis method is subjective with regard to how taxonomies are created and how particular images are coded as positive, negative, or neutral. Second, the method combines data from unrelated sources, treating ‘‘the media’’ as a monolithic institution with unified intent. Finally, content findings are almost always attached to a set of generalized statements about the product, with no attention to the divergent cultures, constraints, and goals of those who produce it. Any effort to change widely promulgated images and perceptions of aging will require analysts to deconstruct these assumptions and focus instead on the workplace concerns of those who generate and select them. Those who study images of aging in the media are clearly interested in documenting social change and influencing its future direction by sensitizing producers to ageist stereotypes and the symbolic impact of a disproportionate emphasis on youth. Any effort to achieve this goal will require active, informed collaboration with media professionals. The moment before the ‘‘age wave’’ breaks is truly a unique opportunity for prompting new thinking about media responsibility for perpetuating and creating images of aging in the United States.

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NOTE Adapted with permission of Harvard University from ‘‘Forty-Nine Plus: Shifting Images of Aging in the Media,’’ which appeared in the 2004 monograph Reinventing Aging: Baby Boomers and Civic Engagement from the Harvard School of Public Health and the MetLife Foundation (Cambridge, MA: Harvard University). A version of this chapter, ‘‘Safe Is the New Dangerous: Analyzing Images of Aging in Media,’’ was presented at the 2006 meetings of the American Anthropological Association as part of the presidential session ‘‘Dangerous Intersections and New Cultural Spaces of Age, Mind and Body.’’ REFERENCES Age Wave. 2003. The company and its history. Http://www.agewave.com/about/ about_history.php. Albert, S. M., and M. G. Cattell. 1994. Old age in global perspective: Cross-cultural and cross-national views. New York: G. K. Hall. Austin, D. R. 1985. Attitudes toward old age: A hierarchical study. Gerontologist 25:431–34. Bell, J. 1992. In search of a discourse on ageing: The elderly on television. Gerontologist 32:305–11. Bergstrom, H. 2002. Age in the press. Working Paper Series, Joan Shorenstein Center on the Press, Politics and Public Policy. Cambridge, MA: Harvard University. Blaikie, A. 1999. Ageing and popular culture. Cambridge: Cambridge University Press. Bradley, D. E., and C. F. Longino. 2001. How older people think about images of aging in advertising and the media. Generations 25 (3): 17–21. Bramlett-Solomon, S., and V. Wilson. 1989. Images of the elderly in Life and Ebony, 1978–1987. Journalism Quarterly 66:185–88. Butler, R. 1969. Age-ism: Another form of bigotry. Gerontologist 9 (4): 243–46. Reprinted in Readings in Aging and Death: Contemporary Perspectives, ed. S. H. Zarit. New York: Harper & Row, 1977. Campbell, C. 2000. Framing: How journalists—and citizens—make facts make sense. Poynter Report (Fall): 5–7. Corbis. 2002. Baby boomers redefine the image of aging. Accessed online 4/5/04 at http://www.creativepro.com/story/news/16557.html. Davis, R. H., and J. A. Davis. 1985. Television’s image of age. From TV’s image of the elderly: A practical guide for change. Lexington, MA: Lexington Books. De Luce, J. 2001. Silence at the newsstands. Generations 25 (3): 39–43. Dial, P. W. 1988. Prime-time television portrayals of older adults in the context of family life. Gerontologist 28:700–706. Evers, H. 1998. Ageing and mass media. Utrecht: Netherlands Platform Older People and Europe. Freidenberg, J. N. 2000. Growing old in El Barrio. New York: New York University Press. Gerbner, G. 1993. Learning productive aging as a social role: The lessons of television. In Achieving a productive aging society, ed. S. A. Bass, F. G. Caro, and Y. Chen. Westport, CT: Greenwood Press.

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Gilmartin, J. 2003. Generations older than the baby boomers are gaining in consumer power. Http://www.lifecoursenavigation.com/press/20030613ttb.html. Grossman, L. K. 1998. Aging viewers: The best is yet to be. Columbia Journalism Review, Jan./Feb. Accessed online 4/5/04 at http://www.cjr.org/year/98/1/ grossman. Gunter, B. 1998. Understanding the older consumer: The grey market. New York: Routledge. Hebdige, D. 1993. After the masses. In Culture/power/history, ed. N. B. Dirks, G. Ely, and S. B. Ortner. 225–35. Princeton, NJ: Princeton University Press. Hess, J. L. 1991. Geezer-bashing: Media attacks on the elderly. Extra!, July/August. Available at http://www.fair.org/index.php?page=1511. Holland Sentinel. 2002. Negative images of aging take toll on elderly, experts say. September 5. Kaiser Family Foundation. 2002. A study of media coverage of health policy, 1997–2000. Columbia Journalism Review (Suppl. January/February). Keith, J., C. L. Fry, A. P. Glascock, C. Ikels, J. Dickerson-Putman, H. C. Harpending, and P. Draper. 1994. The aging experience: Diversity and commonality across cultures. Thousand Oaks, CA: Sage. Kelly, P. 2002. Ageism’s stereotypes getting old. Charlotte Observer. December 3. Kilbourne, J. 1999. Deadly persuasion: Why women and girls must fight the addictive power of advertising. New York: Free Press. Kleyman, P. 2001a. Journalist exchange on aging: Support for covering a complex field. Generations 25 (3): 17. ———. 2001b. Media ageism: The link between newsrooms and advertising suites. Aging Today 22 (2): 5. Krueger, B. 2001. How aging is covered in the print media. Generations 25 (3): 10–12. Leinweber, F. 2001. The older adult market: New research highlights ‘‘key values.’’ Generations 25 (3): 22–23. Levy, B. R., M. D. Slade, S. R. Kunkel, and S. V. Kasl. 2002. Longevity increased by positive self-perceptions of aging. Journal of Personality and Social Psychology 83:261–70. Low, S. 2001. The edge and the center: Gated communities and the discourse of urban fear. American Anthropologist 103 (1): 45–58. Makoni, S., and K. Stroeken, eds. 2002. Aging in Africa: Sociolinguistic and anthropological approaches. London: Ashgate. Markson, E. W., and L. A. Hollis-Sawyer, eds. 2000. Intersections of Aging: Readings in social gerontology. Cary, NC: Roxbury Publishing Company. Maynard, N. H. 2000. Mega media: How market forces are transforming news. Victoria, BC, Canada: Trafford. ———. 2003. Executive summary: Forces driving the future of news. Mochis, G. P. 1994. Marketing strategies of the mature market. Westport, CT: Quorum Books. Moses, Lucia. 2003. Sunday will never be the same. Editor and Publisher online. Accessed 4/5/04 at http://www.editorandpublisher.com/editorandpu. . ./article_ display.jsp?vnu_content_id=195319. http://www.editorandpublisher.com/eandp/ article_brief/eandp/1/1953565.

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Neuman, W. R., M. R. Just, and A. N. Crigler. 1992. Common knowledge. University of Chicago Press, Chicago, IL. NPD Group. 1999. Aging boomers could drive reading boom, says NPD study. Available online at http://www.npd.com/press/releases/press_990714.htm. Packaged Facts. 2002. The U.S. baby boomer market: From the Beatles to botox. 3rd ed. Rockville, MD: Packaged Facts. ———. 2005. Baby Boomers and the U.S. Food and Beverage Industry: Trends and Opportunities in Health, Natural and Organic, Gourmet, Ethnic and Convenience Foods. Rockville, MD: Packaged Facts. Piven, F. F., and Richard Cloward. 1993. Regulating the poor: The functions of public welfare. New York: Vintage. Rosel, N. 2001. Inconspicuous consumption: How a small sample of rural elders see images in the media. Generations 25 (3): 47–51. Roy, A., and J. Harwood. 1997. Underrepresented, positively portrayed: Older adults in television commercials. Journal of Applied Communication Research 25 (1): 39–56. Savishinsky, J. 2000. Breaking the watch: The meanings of retirement in America. Ithaca, NY: Cornell University Press. Scherer, M. 2002. Does size matter? Columbia Journalism Review (November/ December). Shavitt, S., P. Lowery, and J. Haefner. 1998. Public attitudes toward advertising: More favorable than you might think. Journal of Advertising Research 38 (4): 7–22. Signorielli, N. 2001. Aging on television: The picture in the nineties. Generations 25 (3): 34–38. Signorielli, N., and A. Bacue. 1999. Recognition and respect: A content analysis of prime-time television characters across three decades. Sex Roles 40 (7–8): 527–44. Available at http://findarticles.com/p/articles/mi_m2294/is_7-8_40/ ai_55083944?tag=content;col1. Simmons, L. 1945. The role of the aged in primitive society. New Haven, CT: Yale University Press. Reprint, New Haven, CT: Archon Books, 1970. Sokolovsky, J., ed. 1997. The cultural context of aging: Worldwide perspectives. 2nd ed. Westport, CT: Bergin & Garvey. Sokolovsky, J., and D. Shenk, eds. 2001. Positive adaptations to aging in crosscultural perspective. Journal of Cross-Cultural Gerontology 16 (1). Speer, I. L. 1993. Older consumers follow different rules. American Demographics 15 (2): 21–24. Torres-Gil, F. M. 1992. The new aging: Politics and change in America. Westport, CT: Auburn House. Tupper, M. 1995. The representation of elderly persons in primetime television advertising. M.A. thesis, School of Mass Communication, University of South Florida. http://www.geocities.com/lightgrrrrrl/index.html. U.S. Senate. Special Committee on Aging. 2002a. Testimony of Becca Levy. ———. 2002b. Testimony of Paul Kleyman. Vesperi, M. D. 2001. Broadcast news: Attitudes toward featuring elders and responding to an aging audience. Generations 25 (3): 31–33. Woolf, L. M. 2003. Ageism. Http://www.webster:edu/woolflm/ageism.html. ———. 1998b. Empirical evidence. Accessed 4/5/04 at http://www.webster.edu/ woolflm/ageismempirical.html.

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Better Together: Generational Reciprocity in the Real World DONNA M. BUTTS AND JAIA PETERSON LENT

We have to remember we are not the last generation on earth. —The Story of the Weeping Camel A society grows great when old men plant trees whose shade they know they shall never sit in. —Greek proverb

C

onnecting generations through structured and unstructured activities makes sense. Whether today’s ‘‘elders-in-waiting’’—the baby boomers—choose to focus on themselves or on their legacy is still to be determined, but one factor that might focus their energies in the latter direction is having opportunities widely available to them that have both a social purpose and visible outcomes. Intergenerational practices and programs can provide the venue for boomers of all abilities to continue as active members of civic life, helping to protect the notion of generational reciprocity that supports the social compact between current and future generations. GENERATIONAL RECIPROCITY Today, people of all different generations share the same streets, city parks, public transportation, and other services. Yet they seldom have cause to interact with each other. Cities and towns invest in facilities that lead to generational segregation, whether through the creation of senior centers, public schools, child care centers, 55-and-up housing developments, or teen

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centers. It is no wonder that natural interactions are limited and that unhealthy stereotypes can develop, threatening the commitment that connects people of different generations (Generations United 2006). While we can look back in history and identify the critical role elders have played in raising grandchildren, that position has been diminished by time demands, mobility, and changing family structures. As Dr. William Thomas notes in his book What Are Old People For? (2004), the advancement and very survival of the earliest humans was predicated on the important role grandmothers played in caring for, and especially feeding, young children. Generational reciprocity is a core value in quality intergenerational programs and policies. It undergirds the social compact that binds the generations to each other. Reciprocity can defined as ‘‘a reciprocal relationship, a relation of mutual dependence or action or influence,. . . responses of individuals to the actions of others.’’ Individuals provide and accept support, services, and comfort at various times in their lives. Reciprocity is that mutual covenant between generations that demonstrates how interdependent the generations are and need to be in order to thrive.Throughout time, each generation has benefited from those that came before them and has, in turn, benefited those who have followed. The reciprocity of giving and receiving must become a commanding principle embraced by civil societies (Kingson, Hirshorn, and Cornman 1986). Understanding reciprocity is important in efforts to create more decent societies that rest on the interdependence of generations—past, living, and those still to come. The social compact provides the basis for progress and depends on cooperation and mutual exchange among generations. Reciprocity between generations means that each generation learns and receives resources from its predecessors, nurturing and passing on knowledge and resources to its successors (Kingson, Cornman, and Leavitt 1997). Intergenerational practice supports the notion that we are better and stronger together. The population is aging. As people are waking up and smelling the demographics, many are jumping on the boomer bandwagon. Some see doom, others see profit, and still others see opportunity. While some point to a ‘‘silver tsunami’’ or ‘‘age wave’’ with alarm, others are striving to create a new era that does not attempt to glorify aging or cast it as a lonely, useless life stage. History, however, shows the need to thoughtfully prepare for this demographic change. In his book Oh the Places You’ll Go!, Dr. Seuss wrote about an exciting life filled with opportunity. However, he said, you will ‘‘head, I fear, toward a most useless place, the waiting place,’’ where you will wait and wait and wait (Geisel and Geisel 1990). When you think about it, adolescence did not exist until the beginning of the twentieth century. When older children were no longer needed to contribute to the family income as soon as physically possible, adolescence was created as the ‘‘waiting place’’ to bridge the

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time from childhood to adulthood. As the life span increases without additional options for this new time in life, there is the danger of creating a new waiting place. The message for the bookend generations becomes, You are too young to contribute and waiting to be, or you are too old to contribute and waiting to die (Butts 2003). We need to create new messages and different options that encourage boomers to continue to reciprocate by engaging in life rather than disengaging. Boomers are saying this, as well. Eighty percent report they do not intend to retire in any traditional manner, but will look to new full- or part-time employment or meaningful volunteer work. They see retirement as a time to write another chapter, not close the book. Many of them (70 percent) say they want to try new things, and 81 percent report they want to learn new things (Peter D. Hart Research Associates 2002). Some view older Americans as our only increasing natural resource (Freedman 1999). As the first baby boomers enter their 60s, one thing that defines them is their diversity. They represent a broad range of socioeconomic groups, cultures, and ethnicities. Some went to Vietnam, while others protested the war; some liked country music, while others embraced rock and roll. Their desires in future retirement will be just as varied. Two avenues are shaping up for boomers wanting to redefine retirement: 1. Voluntary work, engaging in efforts to improving civic life 2. Paid work, pursuing a new career of interest, which could also benefit others

Voluntary work provides a viable option for those boomers who have the financial means to support their retirement. However, institutions are lagging behind in understanding and offering the types of volunteer roles older adults are seeking and in creating recruitment and retention programs. Federal policy, for example, is still primarily concentrated on the dependency of older adults rather than the potential to engage them (Harvard School of Public Health 2004). Marc Freedman of Civic Ventures is focused on developing opportunities for what he has labeled ‘‘encore careers’’ for older individuals, who are at the intersection of continued income, new meaning, and significant contribution to the greater good (Freedman 2007). In its efforts to promote a new way of viewing later life, Civic Ventures launched the Purpose Prize, designed to bring attention to social entrepreneurs who make significant contributions after the age of 60. WHAT HAPPENS WHEN GENERATIONS ARE SEPARATED? Changes in the ways we build our communities and live our lives are having a major impact on how generations relate to each other. Finding the natural venues for building connections between young and old has become a

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growing challenge. We build living space with senior-only housing, where grandparents who unexpectedly take on the care of their grandchildren risk being evicted. We build separate teen centers and senior centers rather than sharing resources to build a community center for all ages. Houses boast large private decks rather than the porches where neighbors used to talk to each other. Without the porches, there is no place for the neighborhood ‘‘grandma’’ to sit out and keep an eye on all her young neighbors, with whom she is as likely to share a piece of her homemade pie as she is to let their parents know if they were causing any trouble. The way we use technology and time may be equally to blame for the disconnect between young and old. Increasingly, the lives of children, youths, and adults are so tightly scheduled that little opportunity is left for informal interactions with neighbors or to truly develop a connection with community members that aren’t part of the junior karate class or high school marching band practice. Time spent walking through the neighborhood often includes an iPod or cell phone connected to one’s ear, making one more likely to miss an opportunity to talk with an older neighbor. While technology presents a great opportunity to build bridges between young and old through intergenerational computer learning and long-distance communication programs, such programs have not kept pace with the rapid technology boom. The resulting potential divide between the younger, more technology-savvy generation and many older people is real. The separation of generations, whether intentional or not, only serves to strengthen the divide, fuel misunderstandings, and propagate stereotypes between young and old. The reality of the impact of this separation is poignantly illustrated through recent activity on the popular social networking website Facebook. Founded in 2004 by a Harvard graduate who created it as a way to help students, faculty, and staff to get to know each other, Facebook has expanded to include networks of high school students, places of employment, and geographic regions. The largest number of registered users continues to be on college-focused sites, with more than 34 million active members worldwide. But the number of visitors 35 and older more than doubled between June 2006 and June 2007, and significant numbers of them are aged 50 and up, according to market researcher comScore Media Metrix (Hof 2007). Not all the longtime users of Facebook are happy about this new population of visitors. One Facebook group called ‘‘Old People Are Aliens under Disguise: The Very Inconvenient Truth’’ has 33 members. The ‘‘Old-People-Smell Fan Club’’ has 52 members, and Young Adults against Elderly People’’ has 9. Each of these groups is an apparent expression of younger members’ dissatisfaction with what some may perceive as old participants looking over their shoulders. Perhaps, suggests one respondent to Freydblog—a blogger whose concern about this anti–older people content led her to launch an online discussion to explore ways to combat these feelings and share another perspective— Facebook’s roots as a college networking tool have sparked a sense of ownership

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that has fueled the anti-elderly sentiment (Davis 2008). Some older Facebook members are responding by joining these ‘‘anti-elder’’ groups to open up a dialogue. Others are starting groups like ‘‘50 on Face Book’’ and ‘‘Born in the 40s,’’ designed to celebrate the older people. Still others have chosen names like ‘‘Boomers Rule,’’ which may likely be less than helpful at building bridges to the younger participants. Some intergenerational conflicts, like those illustrated on Facebook, are real and have likely resulted from the way we have separated the generations through the creation of age-segregated communities and overbooked schedules. Others are instigated or sometimes fabricated by those who stand to gain. The Politics of Intergenerational Conflict Both the political sphere and the media have a history of embracing images that play on the potential misunderstandings and conflict between young and old. During the recession in the mid-1980s, much of the discussion in Washington, D.C., centered on the dearth of federal resources to address health and human service needs and decisions about how to allocate them. During that time, one cover of Aging International magazine featured a picture of an older man and a young boy back-to-back, in fatigues, each holding cocked weapon, prepared to walk ten paces and shoot. The last man standing, it implied, would get the resources. Such images of intergenerational conflict were being promoted by political interests groups who hoped to further their agenda by framing the discussion in a way that pitted advocates for the elderly against children’s advocates, distracting observers from their true agenda. The media took the bait, running headlines like ‘‘Greedy Geezers’’ and ‘‘Kids vs. Kanes.’’ One organization, Americans for Generational Equity (AGE), used such images to prey on critical programs for younger and older people by negatively engaging American ideals of independence and fairness. Eric Kingson of Syracuse University explains, ‘‘ ‘fairness between generations’ not ‘fairness between haves and have-nots’ was AGE’s primary criterion used to judge to good society. Essentially ignoring race, income, gender, and ethnic inequities, AGE’s spokespersons argued that generational inequities were the root cause of most domestic ills. Painting a picture of demographically driven disaster, they prescribed large cuts in Social Security, Medicare, and related programs. Along with stereotypes of elders as ‘greedy geezers’ and the antitax rhetoric of the day, ‘generational equity became an important rhetorical weapon for those seeking to shrink public commitments’ ’’(Kingson 2007, 5). Organizations such as Generations United emerged to combat these messages and help advocates for older and younger groups find common ground and unite in support of people of all ages. Today AGE-like sentiments have reemerged in new guises. As we face a historically high deficit, an expensive war, and increasing health costs,

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politicians and advocates should be wary of the resurgent efforts of organizations like AGE to pit young and old against each other in order to distract the nation from asking more politically volatile questions about the war and the nation’s tax structure and addressing the issues of the uninsured. In August 2007, House Minority Leader John Boehner sent a harsh letter to AARP accusing it of supporting a Children’s Health Insurance Bill at the expense of health care for seniors. In reality, the bill made cuts to Medicare Advantage, a private scheme funded by taxpayers that enriches insurance companies by giving them inflated reimbursements while often failing to deliver on its promises of improved coordination and service. Advocates argue that these funds could be more effectively used to help seniors and children in other ways. At same time, America’s Health Insurance Plans, a powerful association representing nearly 1,300 companies that sell health insurance, picked up on the tension and seized the opportunity to launch a campaign that effectively frightened seniors into believing they would lose vital coverage if the changes were enacted. The campaign carefully crafted the association’s message in a way that accused Congress of playing intergenerational politics and robbing seniors to cover children—a claim long-term advocates have shown to be false. AARP, the nation’s most powerful advocacy group for seniors, helped tear down the fac¸ade of intergenerational conflict in the recent Children’s Health Insurance debate when it came out clearly in support of expanding health insurance for children. John Rother, AARP’s policy director explains: Despite the ‘‘maturity’’ of our members, generational conflict is no part of what we’re about at AARP. In our view, the generations are bound together through family—children, parents, grandparents, kin. We are interconnected—and interdependent—now, and through time, as the old move on, and the young become old, and new generations spring up—and what we do for one, we do for all, and for all our futures. This is not a competition, it’s a communityone with many common interests—especially those interests that go to the heart of things—and shared responsibilities. (Rother 2007, 5)

While efforts to improve health care for children and seniors continue to face an uphill battle, unlike in many similar debates in the past, this one did not succeed in pitting children and seniors against each other. Leaders such as Families USA, the Center on Budget and Policy Priorities, and Generations United acted as catalysts for dialogue between aging and children’s advocates and helped groups join forces in efforts to push for improvements that would help all ages. These groups have formed policy committees and coalitions with diverse members that have met regularly to find common ground during times of budgetary abundance as well as during times of scarcity. As a result, advocates from children’s and seniors’ groups have a healthy, constructive history with each other and have established a foundation of

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trust that is critical when they enter into dialogue about potentially contentious resource discussions. Final outcomes for many proposed improvements in health care are still pending, but children’s and seniors’ advocates are acting as allies, not as opponents. The Role of Media in Propagating the Conflict Myth Those who are not immersed in the political dialogue inside the Washington beltway have not been protected from images of intergenerational political conflict. Indeed, such images have been pumped into living rooms since the early years of print media and television. Even in our leisure, we are bombarded with images that call us to put up our defenses against those born decades before or after us. From Mr. Wilson heralding his anger over his treacherous young neighbor, Dennis the Menace, to the rantings of Jack Lemmon and Walter Matthau in Grumpy Old Men, viewers are subjected to the stereotype of the grouchy older person to be feared or fought. The longest-running television sitcom in the United States, The Simpsons, has thrived on the dueling, stabbing remarks between young Bart Simpson and his elderly grandfather, illustrated in this scene when Grampa pays a visit: MARGE (Bart’s mother): Where are we going to put him? HOMER (Bart’s father): Bart’s room. LISA (Bart’s sister): Bart’s room. MARGE: Bart’s room. BART: Dumpster.

With such images and structures in place, perhaps we should not be surprised to learn that Facebook’s ‘‘I Don’t Wanna Be Facebook Friends with Senior Citizens!’’ group boast 231 members. Yet, while these examples are striking and some perhaps even a little frightening, formal research shows us that, when asked directly, young people and seniors unquestionably care about each other and want resources to be distributed in a way that benefits one another. A 2004 survey by International Communications Research asked Americans a series of questions concerning views on public funding of health care programs for children and for the elderly. No demographic group registered less than 83 percent support in favor of government ensuring funding for health care for low-income children nor less than 87 percent in support of the low-income elderly. Sixty-three percent of persons aged 18–34 disagreed or strongly disagreed with the statement that the health needs of seniors were being met (Berk et al. 2004). Furthermore, a June 2007 nationwide survey revealed that 63 percent of seniors support raising the cigarette tax to pay for an expansion of the State Children’s Health Insurance Program (Mellman Group 2007). Such research suggests that the potential exists to connect the generations in a way that benefits local

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communities, federal policies, and the national dialogue. The question lies in determining the best way to harness that potential. WHAT WORKS For many, intergenerational programs bring to mind sweet images of children singing Christmas carols to a group of seniors in a nursing home, or a senior crossing guard protecting kindergarteners as they cross the street. While valuable and appreciated activities, elevating only these limited, ‘‘nice’’ types of intergenerational activities does a disservice to communities with critical issues that could be addressed through cutting-edge intergenerational strategies. In her book Connecting Generations, Barbara Friedman talks about the impact one intergenerational pen pal program had on a young immigrant girl and her older ‘‘pal.’’ I remember so clearly the nine-year-old immigrant Jewish girl whom I randomly paired in a pen-pal program with an older woman who had no family.. . . After the 20 week program, pen pals finally met. I knew something important had happened in their relationship, because they greeted each other with a hug that was more than perfunctory. I didn’t know how important it was until six months later when I received a phone call from the woman. She exclaimed, ‘‘I just had to tell you how wonderful my grandchild is.’’ I replied, ‘‘Rita, I thought you had no family?’’ ‘‘Oh, not biologically,’’ she continued, ‘‘I helped that little girl adjust to America and really formed quite an emotional attachment. We decided to stay in touch. This summer when I needed cataract surgery and had no family to help me, she and her dad and mom were wonderfully supportive. Then, just yesterday they came to my house and asked me if it was okay if they bought a home near me so they could take care of me for the rest of my life!’’ . . . And as if that wasn’t enough, she continued, ‘‘You know I am an Arab.’’ (I didn’t not know, Actually I had guessed she was Jewish and the paring would result in commonality!) ‘‘My new family and I have talked a lot about the Israeli-Arab problems. I’ve been so angry for so long, but not anymore. If we can love each other so much, why can’t they?’’ (Friedman 2005, xiv)

This glimpse into one connection built through a simple intergenerational program demonstrates the potential beyond the nursing home birthday party and even beyond addressing basic local community issues. Effective programs can begin to impact international dialogue and conflicts dating back thousands of years. This experience with well-designed intergenerational programs is not uncommon. Inspired by a project of the same name in Baltimore, Magic Me is an intergenerational arts program in London that engages younger and older people in a variety of projects, from poetry to drama to music. The makeup of one of its sites in London’s East End reflects the cultural and ethnic differences among the participating generations. The school population

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is about 70 percent Bangladeshi Muslim young people, whereas the 70-plus generation is about 70 percent white indigenous older people. Participants entered the program with questions like, ‘‘How do I connect with my neighbors?’’ ‘‘Are they going to speak my language?’’ ‘‘Why do they wear those clothes?’’ and the program gave a safe and comfortable place to ask those questions. Soon groups found many similarities. Many lived just down the street from each other, for example. Others shared a mutual concern about drug dealing in their neighborhoods. The program provided a venue and structure for people to find what their commonalities were and to take pride in their differences (Brown 2007). In a similar vein, Age Concern of Northern Ireland is working to bring together younger and older people from across Catholic and Protestant communities to share skills and experiences in a mutually respectful context in order to weaken stereotypical attitudes and behavior. Participants report experiencing a greater sense of tolerance across ages and faiths (McConnel 2003). Intergenerational connections can be nurtured in a variety of ways, from structured intergenerational programs between unrelated individuals, such Magic Me in London and Barbara Friedman’s pen pal program, to supportive services that nurture intergenerational relationships between related individuals, such as grandparent-grandchild summer camps where ‘‘long-distance grandparents’’ can get closer to their grandchildren or supportive services for grandparents raising grandchildren. Experts are building the pool of research on these varied programs. Available studies to date overwhelmingly show that thoughtfully planned intergenerational programs that engage the generations in a purposeful way with clear goals have positive outcomes. Several studies demonstrate that children in intergenerational programs are as likely to view a 7-year-old as they are a 70-year-old as someone who could be their friend. They have an enhanced perception of older adults, are less concerned about wheelchairs and canes, and demonstrate improved reading scores and fewer behavioral problems than their peers. The Center on Ageing and Health at Johns Hopkins University found significant health benefits for the older adult participants in intergenerational programs. The researchers reported that they were more likely to be physically active, boasting a 31 percent increase in the number of blocks walked over the study period compared to nonparticipants, who reported a 9 percent decrease in their walking; 44 percent reported feeling stronger, compared to 18 percent of the control group. The participants also reported they were more likely to engage in social interaction and read books and that they watched less television (Rebok et al. 2004). Older adults who regularly volunteered with children burned 20 percent more calories per week, experienced fewer falls, were less reliant on canes, and performed better than peers on memory tests (Rosebrook 2007; Rebok et al. 2004). These benefits suggest the substantial impact such strategies could have if they were implemented widely. The following discussion lays out examples

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of the range of such programs. For the purposes of this discussion, efforts to build intergenerational connections will be characterized in four categories: planned intergenerational programs targeted to connect unrelated individuals; intergenerational shared sites and communities for all ages; intergenerational advocacy coalitions; and services to support intergenerational family connections. Planned Intergenerational Programs with Unrelated Individuals If history proves a good indicator of what is to come, our nation’s baby boomers will not be satisfied with the stereotypical sweet intergenerational programs. Instead of participating in the ‘‘rock a baby’’ programs of the 1960s, baby boomers, many of whom were active in the civil rights movement, are more likely to want to ‘‘rock the boat.’’ Innovative programs are evolving to take on some of our communities’ most challenging and taboo issues from global warming to child abuse and juvenile delinquency issues. One example from Australia is a program called Hand Break Turn, which recruits older motorcycle enthusiasts, otherwise known as ‘‘bikers,’’ to mentor and teach marginalized young people who have a history of motor vehicle theft and/or are unemployed. The purpose of the program is to teach disadvantaged youths the skills they need to be able to find employment in a field they love—in this case, automobiles. The program recruits and engages a segment of older society that often is overlooked as good role models for younger generations and honors their skills and talents (Feldman 2005). While innovative projects continue to sprout up everywhere, advocates should not forget the consistent benefits of some time-tested programs such as Foster Grandparents, Experience Corps, and friendly visiting programs. These and other proven national and community-based programs can act as solid foundations from which to test innovative demonstrations. In recognizing the tremendous contributions of the baby-boomer generation, Big Brothers Big Sisters, for example, launched an initiative to identify and recruit older adults as youth mentors. The matches between the older ‘‘bigs’’ and their paired ‘‘littles’’ are proving to be some of the best the program has seen. The YWCA worked with high schools in Salem, Oregon, to take the ageold friendly visiting program to a different level. It paired teenagers, some of whom were truant, with homebound seniors to engage in weekly visits. Rather than the stereotypical middle-aged churchgoing housewife friendly visitor of social work textbooks, these young ambassadors arrived in ripped jeans and red Mohawks. The results? The only day many of these seniors would get dressed and open their curtains was the day their young visitor was coming. For the chronically truant young people, the one day the teacher could count on them coming to school was the day they were to meet with their homebound friend. They both had to be there for each other. They knew they were needed.

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Intergenerational Shared Sites and Communities for All Ages Across the nation, developers, program directors, and community planners are becoming increasingly interested in how to connect the generations through the way we build our space and revitalize our communities. Intergenerational shared sites and communities for all ages provide ideal settings for effective intentional intergenerational programs, while also providing opportunities for spontaneous interaction between the generations. Emerging in the 1960s with rapid growth in recent decades, Del Webb’s Sun City communities appealed to generations looking for warmer weather and pristine settings to play golf and bingo with their peers. But part of the deal included restrictions on the length of time young people could spend visiting their grandparents or older friends. How these communities will evolve to serve the desires of the baby boomers remains to be seen. Research suggests an age-integrated community model will have more appeal. Baby boomers are more likely to want to stay connected and engaged in the communities where they now live. A recent study by Civic Ventures finds 73 percent of baby boomers have no plans to move to the Sun Belt after retirement, preferring to live in age-integrated communities where they have worked and played (Peter D. Hart Research Associates 2002). Among older Americans ages 50–75, 56 percent say civic engagement will be at least a fairly important part of retirement. Working with children was found to be the most appealing volunteer activity among older adults (Peter D. Hart Research Associates 2002). This interest presents an opportunity that can be nurtured through the promotion of innovative shared sites and communities for all ages. Nancy Henkin, executive director of the Temple Center for Intergenerational Learning, has been leading efforts across the United States to promote the transformation of communities in a way that explicitly promotes crossage interaction and systems that are responsive to individuals and families across the life course. These ‘‘communities for all ages’’ focus particular attention on youth and older adults as resources to meet community needs. The communities are created around core values of independence, reciprocity, individual worth, diversity, inclusion, equity, and social connectedness (Henkin et al. 2005). The city of Falcon Heights, Minnesota, began to take steps toward becoming a community for all ages when Mayor Sue Gehrz committed to making intergenerational interaction a high priority. The mayor gathered a diverse group of eighty-seven people from the ages of 12 to 88 to participate in a dialogue in response to the tragedy of 9/11. The group, representing all faiths, ethnicities, and nationalities, developed 126 action steps to improve safety in the community and prepare for future acts of terrorism and naturally occurring disasters such as tornadoes and hurricanes. The city created the Intergenerational Commission on Homeland Security, which laid the foundation for the Neighborhood Commission—now one of four permanent

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commissions or advisory groups that help to guide city government in Falcon Heights. Every effort is made to incorporate the voices and concerns of all generations into policy decisions that are made by the mayor. This is done in part by creating formal structures within the city government that facilitate communication and decision making by all generations. Intergenerational participation is encouraged in all Falcon Heights activities and programs, as well as in private events held in public spaces. Specifically, the city declares that intergenerational interaction is a public policy goal of the City Council, policy proposals must incorporate the ideas and concerns of multiple generations, there is intergenerational participation on city advisory boards, and the use of city facilities is free to intergenerational groups.

SIDEBAR: SERVING THE NEEDS OF YOUNG PEOPLE AND SENIORS IN MASSACHUSETTS: THE JOURNEYS OF THREE TOWNS The town of Hanover, Massachusetts, faces a not-so-unfamiliar dilemma. With a changing and growing population, it needs a new facility to serve its seniors at the same time that plans are under way for a new school. Advocates for the senior center are upset, predicting that with limited resources, the pressure to build a new school will overrule the campaign to build a new facility for the Council on Aging headquarters, which currently, requires older visitors to approach down a steep hill and navigate a century-old building that is not handicapped accessible (Wallgreen 2007). Unfortunately, the response of senior advocates has been to point fingers to champions for the school, complaining that the youth usually win out. Similarly, in nearby Salem, a proposal to turn a former church into a new senior center that would have been used as a community center for people of all ages was shot down by the City Council. Those opposed argued that you can’t have young people and senior citizens in such close proximity to each other. Both cities remain without consensus and with no clear plans to address the needs of either their young people or their older citizens. These towns would be well served to observe the success of the neighbor, Swampscott. It wasn’t easy, but after four years of building collaborations and thoughtful partnerships, the city of Swampscott found another option. Faced with the need to provide buildings and services for both their younger and older community members, Swampscott leaders worked together and recently opened their new high school. It has a very special feature: it is also home to a senior center. The community is raving about the stunning facility, which also features a slick cafeteria, arts corridor, and field house. The plans for the school were transformed to create an intergenerational learning center. ‘‘You judge a community on how they take care of their young people and their senior citizens,’’ said the school’s principal, Lawrence Murphy. ‘‘What could be better than that? This is a very unique community’’ (McGregor 2007). Those involved with the project give credit to a very talented building committee that stuck with the project and was committed to coming to consensus and addressing the array of community needs.

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Intergenerational shared sites are often key elements of communities for all ages. These range from senior centers located in public schools to collocated adult day and child care centers, to supportive intergenerational housing designed to support youth aging out of the foster care system. Research on these programs demonstrates positive outcomes for the children, adolescents, and seniors involved. The Hope Meadows community of Rantoul, Illinois, is an intergenerational community that engages older adult community members as supports to adoptive and foster families with three or more children. Today there are eleven families at Hope Meadows, with twenty-eight adopted children, thirteen biological children, and seven children still in foster care. Hope Meadows has helped seventy-five children achieved permanency, for an overall permanency rate of nearly 89 percent (Eheart et al. 2005). Taking a cue from the success of Hope Meadows, efforts are cropping up across the United States to emulate its experience. Land has been acquired for similar projects in at least seven other states. A few such projects are already in operation, including the San Pasqual Academy in San Diego, California, which engages senior residents of housing adjacent to a group foster care facility. The seniors volunteer to help the youths in exchange for below-market rent. They act as resident mentors or foster grandparents to the children who are not on an adoption or family reunification track. They mentor the young people to develop independent living skills that assist in their long-term success as the students transition out of the foster care system. The strength of these connections is illustrated through reports that alumni of the program come back to stay with their senior mentors during holiday breaks from college. More traditional examples of shared sites such as Onegeneration intergenerational day care in Van Nuys, California, demonstrates clear positive outcomes for participants. Onegeneration provides developmentally appropriate day care services for both frail seniors and children aged 6 weeks to 6 years. A study of the program revealed older adult participants with dementia experienced more positive affect during intergenerational activities than during nonintergenerational activities, and those programs seemed to have a lasting positive effect on participants that carried over to the nonintergenerational activities in which they were involved (Jarrot and Bruno 2003). Intergenerational Advocacy Coalitions As illustrated in the recent national debate over health care, messages from the media and politicians seeking to pit the generations against each other demonstrate a need for intergenerational coalitions. Generations United has led work in this area through the creation of its intergenerational public policy agenda for each Congress and the work of its public policy committee, which is made up of representatives from leading aging and children’s groups, including AARP, the Children’s Defense Fund, the National Council on Aging,

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and the Child Welfare League of America. Through briefings, sign-on letters, and Capitol Hill lobby days, this group regularly educates Congress about the need to create policies that support all generations. Sometimes these educational efforts are most effectively done in the home districts of key legislators. In 2001, the Bush administration created a Social Security commission to explore a plan to partially privatize the system. Shortly after the commission was created, the chair of the powerful House Ways and Means Committee began conducting a series of field hearings designed to pit the generations against one another over Social Security. In the face of these initiatives, children, families, and seniors and their advocates joined together to educate members of Congress about the importance of preserving Social Security. The first of the House hearings, held in Columbia, Missouri, attracted a diverse coalition of young people, organized labor, people of color, women, people with disabilities, and retirees, who held a press conference in opposition to privatization plans just outside the building where the hearing was to be held. The speakers were backed by a crowd of cheering activists of all ages with signs emphasizing their unified voice supporting the protection of the Social Security program. The press conference drew significant attention from local media to the theme that Social Security is an intergenerational program and that privatization is not in the best interest of working Americans, no matter their age. Many activists attended the hearing, where they articulated that Social Security is too important a program for Congress or the administration to threaten. A national movement to preserve the program has followed, and plans to privatize the program have fallen off the political agenda. Recently an intergenerational advocacy model at the state level has been growing around the issue of early childhood education. Piloted in Florida, Seniors4Kids, a partnership of Generations United and the Children’s Campaign, has engaged Florida residents aged 50 and over who were interested in helping to transform Florida’s public education system into a national model to volunteer as ELDER (Energetic Leaders Demanding Education and Results) captains. The captains promote needed changes to the state’s universal pre-kindergarten program for 4-year-olds. To date, more than a hundred seniors have joined the statewide advocacy effort. Their contributions have led to notable gains on behalf of high-quality education in Florida. The project is slated for expansion to Ohio, New York, and Kentucky. Services to Support Intergenerational Family Connections Nurturing intergenerational connections within families is also crucial. When effectively supported, older relatives act as critical resources to children and their parents. Conversely, families often provide essential support to older adult family members to help them live longer, more meaningful, and healthier lives. Important work is being done to support traditional

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family caregivers of older adults through services of the National Family Caregiver Support program, which provides funding to area agencies on aging to offer information and referral, respite care, support groups, and training to family caregivers. Lead organizations in the field such as the Family Caregiver Alliance, the National Alliance for Caregiving, and the National Family Caregivers Association offer a variety of information and tools to help caregivers and to educate Congress about the need for supportive policies. AARP, Elderhostel, and the Foundation for Grandparenting each offer opportunities and tools designed to help grandparents connect with and nurture relationships with their grandchildren, including grandparent–grandchild camps, group travel, and activity guides. But the contributions of grandparents and other older relatives of children reach beyond the precious moments experienced through these opportunities. Older family members support children and families by providing financial support, transmitting venerable cultural traditions, and even providing full-time care for children when their parents are unable to. Grandparents contribute directly to the financial well-being of grandchildren in two ways: through time and money transfers. Studies show that between 25 and 40 percent of grandparents give monetary gifts to their grandchildren (Silverstein and Marenco 2001; McGarry and Schoeni 1997; Soldo and Hill 1997). On average, grandparents with at least one child and one grandchild, who made monetary transfers to a child, provided more than $4,400 annually (Cardia and Ng 2003). More grandparents give time than money to contribute to their grandchild’s well-being. The contribution of time, primarily through child care or shared activities, may enable the adult children to engage in labor force activities. Data from the Survey of Income and Program Participation suggests that of the 62.5 percent of children under 5 in regular child care in 2002, 22.7 percent were cared for by a grandparent (Overturf Johnson 2005). A nationally representative sample survey of grandparents found that about 78 percent of grandparents with a grandchild under 13 years of age had provided some ‘‘baby-sitting services during the past year’’ (Silverstein and Marenco 2001). Another study of a representative sample of grandparents revealed that 42.9 percent had provided at least 100 hours of child care, for an average among those providing care of 1,177 hours per year (Cardia and Ng 2003). These time contributions may add up to the equivalent of a considerable amount of money, considering that child care workers earn a median wage in excess of $7 an hour (Folbre 2002). A significant number of the hours of child care provided to grandchildren comes from grandparents that are full-time caregivers of grandchildren. About 2.4 million grandparents are primarily responsible for raising their grandchild in the United States. About six million children are raised in grandparent- or other relative-headed households. By stepping in to care for these children and preventing them from entering the foster care system,

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grandparents and other relatives save taxpayers an estimated $6.5 billion a year (Generations United 2007). Research shows that children fare well in foster care with relatives when compared with children raised in foster care with nonrelatives. They are just as safe or safer with relatives, more likely to remain with their siblings, less likely to switch schools, and better able to stay connected to their cultural traditions and heritage (Generations United and Pew Charitable Trusts 2007). CARRYING THE CONCEPT OF GENERATIONAL RECIPROCITY INTO THE FUTURE As more people understand the importance of connecting generations for individual and collective value, interest grows in how to develop the bridges between generations. This can manifest itself in several ways, including but not limited to learning from the implementation of intergenerational practice in other countries, using tools and adapting models for local use, infusing intergenerational practice in unlikely areas, and engaging new audiences. Taken together, these areas have the ability to carry the concept of generational reciprocity into the future as boomers age. Increase in International Intergenerational Efforts Globally, intergenerational practice is on the increase. Documented countrywide efforts are under way in the United Kingdom, Spain, Germany, and Japan. These networks are housed at universities and nongovernmental organizations. They are supported through foundation and government funding. For example, the Japan Intergenerational Unity Network, which was launched in August 2006, and the developing Intergenerational Network of Spain are both university based. The British effort, which is based with the Beth Johnson Foundation, has far-reaching governmental and private support. Even Queen Elizabeth II remarked in her 2006 Christmas address that modern life was loosening familial ties and the traditional bond between generations. She went on to say: The pressure of modern life sometimes seem to be weakening the links which have traditionally kept us together as families and communities. As children grow up and develop their own sense of confidence and independence in the ever changing technological environment, there is always the danger of a real divide opening up between young and old, based on unfamiliarity, ignorance and misunderstanding. (New York Times 2006)

Toward a Society for All Ages Some of this interest has been sparked by the United Nations Focal Point on Ageing, Department of Economic and Social Affairs, which has worked to change the global perspective on aging. The Vienna International Plan of

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Action on Ageing was released following the Second World Assembly on Ageing in 1982. It addressed aging from the standpoint of the humanitarian needs of older people. The Madrid International Plan of Action on Ageing, which followed the 2002 world assembly, included the goal of moving older persons ‘‘from social exclusion to integration and participation’’ and offers a view of aging from a developmental perspective (Sideorenko and Walker 2004). The Madrid plan builds on the concept of ‘‘A Society for All Ages’’ developed for the United Nations’ International Year of the Older Person in 1999. It supports several of the themes that provide the foundation for implementing the Madrid plan, including intergenerational interdependence, solidarity, and reciprocity. The Society for All Ages is a society where ‘‘every individual, each with rights and responsibilities, has an active role to play.’’ By integrating ‘‘age’’ into a society for all, the approach becomes multigenerational and holistic, whereby ‘‘generations invest in one another and share in the fruits of that investment, guided by the twin principles of reciprocity and equity’’ (United Nations 1995). International Consortium for Intergenerational Programmes The International Consortium for Intergenerational Programmes (ICIP) was launched in 1999 in the Netherlands. ICIP is the only international membership organization focused solely on promoting intergenerational programs, strategies, and public policy from a global perspective. It seeks to promote intergenerational practice internationally as an agent of global social change. ICIP believes one of the main contributions intergenerational programs may make to national policy is to promote social cohesion, national unity, and shared responsibility. The first ICIP International Intergenerational Conference, ‘‘Connecting Generations: A Global Perspective,’’ was held in April 2002 at Keele University in England. The resulting report suggested a new definition for intergenerational programs: Intergenerational programs form a system, an approach and practice in which all generations, irrespective of age, race, location and socio-economic status bind themselves together in the process of generating, promoting and utilizing ideas, knowledge, skills attitudes and values in an interactive way for the improvement of self and community. (Hatton-Yeo 2002)

Following four successful international conferences, ICIP continues to inspire intergenerational practice around the globe and could be an important global connector as world demographics evolve. Tool Kits Inviting Community-Wide Assessment Several groups have accepted the challenge of creating tool kits that can be used to assess and develop community-based initiatives. Each is designed

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to encourage and provide resources for local groups as they prepare for aging baby boomers. For example, Sustainable Communities for All Ages: A Viable Futures Toolkit (JustPartners, 2006), combines the best practices of intergenerational programming and environmental awareness. The toolkit provides information to help towns and cities develop viable futures for today’s populations and future generations with a spotlight on human and natural resources. A Blueprint for Action: Developing a Livable Community for All Ages was released in 2007. Created by the National Association of Area Agencies on Aging and Partners for Livable Communities with support from MetLife Foundation, this workbook is designed to help communities determine how ‘‘age ready’’ they are. Opportunities for intergenerational exchange feature prominently in the assessment and implementation materials. The Environmental Protection Agency’s Aging Initiative features ‘‘Building Healthy Communities for Active Aging,’’ which encourages communities to integrate ‘‘smart growth’’ and ‘‘active aging’’ principles. The World Health Organization (WHO) recently unveiled a new publication, Global Age-Friendly Cities: A Guide (2007), based on a review of thirty-three cities ranging from Nairobi, Kenya, to Portland, Oregon. It includes the characteristics the WHO determined to be essential to age-friendly cities, including respect and social inclusion. All of these efforts point to the growing interest in intentionally engaging people of all ages, and should be continued. Fostering Interest among Children and Youth Groups Support for intergenerational programs has traditionally come from the aging field. When interest has been expressed among groups focused on younger generations, the reciprocal element is often missing. The Annie E. Casey Foundation, however, has developed an ‘‘Elders as Resources’’ portfolio for consideration in its grant making that does honor the bond between generations. The foundation’s mission is to foster public policies, humanservice reforms, and community supports that more effectively meet the needs of today’s vulnerable children and families. The organization began its exploration of elders because they are integral members of the families that raise the children—and of the communities in which they live. When we pay attention to their powerful assets and attitudes, we discover that elders can and do provide support, skills, leadership, and social capital that improve the lives of these children. (Annie E. Casey Foundation 2005)

Children and youth advocates will better serve the populations care about if they engage older adults in all aspects of their work rather than trying to engage them at their convenience.

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CONCLUSION Baby boomers have one thing in common: The perception that they are fascinating. The media and political rhetoric that surround their ‘‘coming of age’’ reinforces this notion. While tastes and trends among boomers are widespread, their interest in defining their lives as they want to is a common thread. Intergenerational programs provide a mechanism for aging boomers to transition to the role of valued elders in society. As the wise ones, boomers can create an individual or collective contribution at local and national levels that proves each generation is stronger when standing together. Building a world that values all ages includes engaging all ages and continuing the circle of reciprocity that has enabled humankind to progress. Intergenerational approaches, while mildly embraced today, will need to be incorporated more broadly into public policies and programs if boomers are to finally reach their full potential in this new place in life. By all accounts, it will not be a waiting place, but a fulfilling place that sparks benefits for generations to come. REFERENCES Annie E. Casey Foundation. 2005. Elders as resources: Point of view. Baltimore: Annie E. Casey Foundation. Available at http://www.aecf.org/upload/publication files/pov.pdf. Berk, M. L., C. L. Schur, D. I. Chang, E. K. Knight, and L. C. Kleinman. 2004. Americans’ views about the adequacy of health care for children and the elderly. Health Affairs, http://content.healthaffairs.org/cgi/content/full/hlthaff.w4.446/ DC1. Brown, G. 2007. Susan Langford. In Britain’s Everyday Heroes, ed. G. Brown, 45–51. Edinburgh: Mainstream. Butts, D. M. 2003. Intergenerational service learning. In Philanthropy across the generations, vol. 42, New directions for philanthropic fundraising, 59–69. San Francisco: Jossey-Bass. Cardia, E., and S. Ng. 2003. Intergenerational time transfers and child care. Review of Economic Dynamics 6:431–54. Center for Health Communication, Harvard School of Public Health. 2004. Reinventing aging: baby boomers and civic engagement. Boston, MA: Harvard School of Public Health. Davis, G. Elder Bloggers Face Off with Facebook. http://www.blogher.com/elderbloggers-face-facebook. Eheart, B. K., D. Hopping, M. B. Power, and D. Racine. 2005. Intergenerational community as intervention. Intergenerational Strategies Series, Occasional Paper No. 3. Baltimore: Annie E. Casey Foundation. Available at http://www.aecf.org/ upload/publicationfiles/eheart.pdf. Feldman, S. 2005. Working together: Showcasing Australian community intergenerational projects. Paper presented at the International Consortium of Intergenerational Programmes Conference, Keele University, Staffordshire, UK, July 12. Folbre, N. 2002. Universal childcare: It’s time. The Nation, July.

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Freedman, M. 1999. Prime time: How baby boomers will revolutionize retirement and transform America. New York. Public Affairs. ———. 2007. Encore: Finding work that matters in the second half of life. New York. Public Affairs. Friedman, B. 2005. Connecting generations: Integrating aging education and intergenerational programs with elementary and middle grades curricula. Washington, DC: Generations United. Geisel, Theodor S. and Audrey Geisel. 1990. Oh, the Places You’ll Go! New York: Random House, Inc. Generations United. 2004. Intergenerational policy projects. Unpublished paper. ———. 2006. Intergenerational shared sites: Making the case. Washington, DC: Generations United. ———. 2007. Grandfamilies: Challenges of caring for the second family. Washington, DC: Generations United. Generations United and Pew Charitable Trusts. 2007. Time for reform: Support relatives in providing foster care and permanent families for children. Philadelphia: Pew Charitable Trusts. Hatton-Yeo, A. 2002. Conference Reports First ICIP International Intergenerational Conference: Connecting Generations—A Global Perspective. Staffordshire, UK: Keel University. Henkin, N., A. Holmes, B. Walter, B. R. Greenberg, and J. Schwarz. 2005. Communities for all ages: Planning across generations. Intergenerational Strategies Series. Baltimore: Annie E. Casey Foundation. Available at http://www.aecf.org/upload/ publicationfiles/cfaa.pdf. Hof, R. 2007. Facebook’s new wrinkles. Business Week, August 20. Available at http:// www.businessweek.com/magazine/content/07_34/b4047050.htm. Jarrot, S., and K. Bruno. 2003. Intergenerational activities involving persons with dementia: An observational assessment. American Journal of Alzheimer’s Disease and Other Dementia 18 (1): 31–37. JustPartners, Inc. 2006. Sustainable communities for all ages: A viable futures toolkit. Baltimore, MD: JustPartners, Inc. Kingson, E. R. 2007. Generations at war: The sequel. Together 12 (1): 5. Kingson, E. R., J. Cornman, and J. K. Leavitt. 1997. Strengthening the social compact: An intergenerational strategy. Washington, DC: Generations United. Kingson, E. R., B. Hirshorn, and J. Cornman. 1986. Ties that bind: The interdependence of generations. Cabin John, MD: Seven Locks Press. McConnel, D. 2003. Age Concern Northern Ireland—Building intergenerational understanding across faith communities. Together 8 (1): 7. McGarry, K., and R. F. Schoeni. 1997. Transfer behavior within the family: Results from the Asset and Health Dynamics Study. Journal of Gerontology 52B:82–92. McGregor, A. 2007. You have everything here! Expo gives town first glimpse inside $56 million school/senior center. Salem (MA) News. August 27. Mellman Group. 2007. National tobacco tax. Memorandum to the Campaign for Tobacco-Free Kids, June 5. Available at http://tobaccofreekids.org/reports/prices/ NationalTobaccoTaxMemo.pdf. National Association of Area Agencies on Aging and Partners for Livable Communities. 2007. A blueprint for action: Developing a livable community for all ages.

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Washington, DC: National Association of Area Agencies on Aging and Partners for Livable Communities. New York Times. 2006. Queen urges Britons to bridge the generations. December 26. Overturf Johnson, J. 2005. Who’s minding the kids? Child care arrangements, winter 2002. Current Population Reports, P70–101. Washington, DC: U.S. Census Bureau. Oxford University Press. 1990. The Concise Oxford Dictionary. Oxford: Oxford University Press. Peter D. Hart Research Associates. 2002. The new face of retirement: An ongoing survey of American attitudes on aging. San Francisco: Civic Ventures. Rebok, G. W., M. Carlson, T. A. Glass, S. McGill, J. Hill, B. Wasik, N. Ialong, K. Frick, L. Fried, and M. Rasmussen. 2004. Short-term impact of Experience Corps participation on children and schools: Results from a pilot randomized trial. Journal of Urban Health 81 (1): 79–93. Rosebrook, V. 2006. Research indicates: Intergenerational interactions enhance young children’s personal/social skills. Together 11 (2): 5. Rother, J. 2007. Beyond intergenerational conflict. Together 12 (1): 5. Sideorenko, A., and A. Walker. 2004. The Madrid International Plan of Action on Ageing: From conception to implementation. Cambridge: Cambridge University Press. Silverstein, M., and A. Marenco. 2001. How Americans enact the grandparent role across the family life course. Journal of Family Issues 22 (4): 493–522. Soldo, J. B., and M. S. Hill. 1997. Family structure and transfer measure in the health and retirement study. Journal of Human Resources 30:S109–S137. Thomas, W. H. 2004. What are old people for? How elders will save the world. Acton, MA: VanderWyk & Burnham. United Nations. 1995. Programme of Action of the World Summit for Social Development. A/50/114. Copenhagen: United Nations. Wallgreen, C. 2007. Needed senior centers often lose in final analysis. Boston Globe. May 24. Wiktionary. 2007. Reciprocity. Http://en.wiktionary.org/wiki/reciprocity. World Health Organization. 2007. Global age-friendly cities: A guide. France: World Health Organization.

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III THE SOCIAL WORLD OF THE BOOMERS

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11

Living Large while Living Small: The Spatial Life of Aging Boomers PHILIP B. STAFFORD

A

mong the experiential worlds likely challenged by the next generation of elders will be the life space itself. For gerontology, this will necessitate a reevaluation of the concept of ‘‘aging in place.’’ As a working concept in gerontology, this phrase has typically been taken in its most literal sense, as staying put in one’s dwelling unit (e.g., Lanspery and Hyde 1997). Yet, despite being hailed as the pinnacle goal for public policy, there has been a curious lack of serious attention to the deep meaning of place in the lives of elders.1 As Kevin McHugh and Robert Mings (1996) have noted, much research has been organized around the assumption that there are two basic dichotomous decisions about location in old age—move or stay put (aging in place vs. migration). As a study variable, in short, gerontology has focused on space (location) rather than place.2 Gerontology notwithstanding, there has been a shift in thinking about space and place in broader intellectual circles.3 Curiously, this shift in spatial understanding from location to meaning seems to correspond with changes in the popular culture reflecting the shift in generational lifestyles from the practical, hard-headed, savings-oriented lifestyle of the World War II generation to the soft, pursuit-of-meaning lifestyles of the baby boomers. A gerontology of space would explore the physical distribution of older people across the landscape. It would not only ask, ‘‘Where do older people live?’’ but also address the dynamic elements of space—the movement or flow of older people within the environment over time. The same questions are pertinent whether

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the scope is macro—focusing on entire populations of older people across the entire world—or micro—focusing on the spatial distribution and movement of older people within a single community or even a single neighborhood. In accounting for this distribution, likewise, we should address both the structural and economic forces that push and pull populations across space, as well as the individual decision making that underlies any one person’s choice to move (or not) from one place to another, whether in the course of a day or a lifetime. While we might seek to explain population trends through the lens of political economy, the trends are, in the end, the aggregate of a series of individual decisions, embedded in and emergent from the world of everyday experience, albeit subject to economic forces. A comprehensive, explanatory model should be able to link the two ends of the spectrum, demonstrating how broad trends are the consequence of individual behaviors and, in the process, enabling us to address both space and place. This chapter will thus address two major questions regarding the spatial lives of aging boomers: Where will we boomers live, and how will we inhabit those spaces?4 To that end, we’ll begin with a discussion of aging and location in the lives of the current cohort of older persons, looking at the conditions that influence behavior and experience. Then we shall examine the implications of changes in those conditions insofar as they might affect the locational decisions of aging boomers—the next cohort of elders. Following a discussion of where boomers will live, we’ll end with some speculation regarding the manner in which boomers will craft place from space and, it is argued, create the new elderburbia.5 AGING AND MIGRATION Much of the interest surrounding the spatial lives of elders has focused on that small subset of the population that chooses to move, relocate, or migrate in retirement. Judging by the amount of popular media coverage given to the annual ‘‘best places to retire’’ reviews, one would think that eternal sunshine and golf represent the gold standard by which a good old age is measured. For those who see the aging enterprise as a vast real estate venture, this image of aging is one to promote. Certainly, fortunes have been made through the promotion of this particular mythology.6 Yet, despite the fact that the national rate of interstate relocation in retirement is actually quite low (5 percent annually and always lower than other age groups, according to Haas and Serow 2002), the absolute numbers of migrants have certainly had a large impact on communities and states that have been on the receiving end of the migration trend. Because of the economic and social impact of retirement migration, there has been a flourishing academic interest in the topic as well, not merely in the United States but in other parts of the world as well (Rogers 1988; Gilleard, Hyde, and Higgs 2007). William Walters (2002) suggests that research on retirement

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migration has been organized around two conceptual models: the push-pull model and the life-course model. As the name suggests, the push-pull model tries to identify attractive and unattractive features of places that encourage and/or discourage in-migration and out-migration. The complementary lifecourse model looks at the personal attributes and characteristics of actual and potential migrants across the life course. LIFE-COURSE ATTRIBUTES As a step toward segmenting the population of migrants (in later life), Walters (2002, 268ff.) selected three primary, measurable attributes of migrating individuals in later life: economic status, disability status, and presence or absence of a spouse. Conflating these attributes with household characteristics of migrants (residential independence, economic independence, institutionalization, and housing cost) and with direction of migration (in or out) enabled the sorting of migrants into three identifiable types, the members of each type being similar in their life-course attributes, their spatial pattern of migration, and their household characteristics. 1. Amenity-seeking migrants are typically, but not necessarily, healthy, married, and financially secure. They constitute the largest segment of migrants (46 percent) and, as the definition would suggest, seek communities with particular appealing amenities (discussed below). 2. Assistance-seeking migrants (28 percent of Walters’s sample) are characterized by a greater degree of residential and economic dependence, that is, they are more likely unmarried and dependent on others (especially family) for income and housing. Unlike the amenity-seeking migrants, Walters found no coherent pattern in the destinations sought by assistance-seeking migrants. 3. Migrants with severe disabilities (26 percent) are individuals at all income levels who move in response to the development of a severe disability. In most cases, the move involves relocation to a nursing home (40 percent of the group) or adult child’s residence.

In addition to describing the background characteristics of the migrant groups, researchers have investigated the decision-making processes that underlie the choice to move. Charles Longino and his colleagues have reviewed some of the personal elements involved in relocation decisions (Longino, Persynski, and Stoller 2002). Citing the work of L. J. Cuba and D. M. Hummon (1993a, 1993b), they note that making a move to a new environment challenges one’s sense of ‘‘place identity,’’ a well of meaning derived from the personal memories and symbolic significance associated with place. In addition, ‘‘staying in a familiar pre-retirement location promises an environment where retirees understand the rhythms and routines of life’’ (Longino, Persynski, and Stoller 2002, 32) One could surmise from this assertion that individuals who have made multiple moves over the course of a lifetime might be predisposed to engage

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in additional moves in retirement and be less dependent on place for a sense of identity. Indeed, their identity (and their adaptive skill) is tied to ‘‘traveling,’’ a term taken from the work of Jaber Gubrium (1993, 103ff.). This argument is strengthened, Longino would suggest, when we incorporate the evidence that vacation and tourism patterns predict retirement destination choices. In addition, relocation decisions are often based on existing ties to friends and family in the destination communities, as McHugh and Mings (1996) demonstrate. And, of course, snowbirds often develop steadily lengthening relationships with seasonal destinations that may resolve into permanent residence. Stephen Katz (2005) provides a rich description of the chain migration patterns of Canadians to Florida and the creation of enclaves that, to a degree, replicate home communities in a warm-weather setting. PLACES THAT PUSH/PLACES THAT PULL Walters’s (2002) review of the migration literature (including popular retirement guides) identified nearly three hundred place characteristics that might be implicated in decisions to move or to stay put. From this comprehensive list, he selected twenty-four items, based on their pertinence to the hypotheses being tested and their clean ‘‘measurability.’’ His study confirms the importance of climate in the destination community as the most significant predictor of in-migration for amenity-seeking retirees, a finding echoed by Longino and colleagues. The latter note, as well, however, that climate preferences can work both ways. Older Minnesotans moving to Florida will most frequently mention the warm climate as a pull factor, while those northerners staying put sometimes view ‘‘the changing seasons’’ as a factor in the decision to stay. Walters, and others, have begun to articulate a more refined definition of the role the natural environment plays in retirement relocation decisions. In the study cited above, Walters (2002) identifies a subset of environmental factors that play a role in destination choice of amenity-seeking migrants: winter mildness; summer air moisture; winter air moisture; summer temperature mildness; wind speed and fog; and lake or ocean access. Among all of the variables, he concludes that winter mildness (moderate temperature and low snowfall) is the single most important predictor. Scott Wright, Michael Caserta, and Dale Lund (2003) would add ‘‘scenic beauty’’ to the list of environmental factors cited by amenity-seeking migrants to the New West (see below) and note the related environmental aspects of recreational pursuits sought by migrants (skiing, hiking, boating, etc.). In addition to the natural environment as a factor in decision making, a number of other place characteristics have been implicated. In his list of variables, Walters added: • Population and population density: Amenity-seeking retirees are inclined to avoid large metropolitan areas and seem to prefer smaller cities and towns. Areas with high concentrations of retirees seem to attract more retirees. For

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retirees living in high-population-density areas, out-migration is deterred, however, perhaps as a factor of rent-controlled housing costs. Retirees living in large metropolitan areas can often find amenities through a local move, while retirees in smaller towns may be more likely to require a longer-distance move to reach preferred amenities. • Economic indices: Using employment figures as an index of community economic health and prosperity, Walters suggests prosperous communities are more likely to support recreational and cultural amenities. • Medical care: The availability of long-term care beds, more so than hospital beds, is a strong predictor for those with severe disabilities. Sufficient local availability deters out-migration and becomes an attractive characteristic in destination communities for this subgroup. Insufficient local availability of long-term care beds is a predictor of out-migration among assistance-seeking migrants. The presence of adult children in the destination community is a major consideration for assistance-seeking migrants, though this introduces randomness into the model, for the adult children may live anywhere. • Crime rates: High crime rates appear to be associated with local migration but are not a factor in interstate migration.

A brief review of the nonscientific ‘‘retirement living guides’’ (CNNMoney.com 2006; Mertz Esswein, Franklin, and Rheault 2005; Retirement Living Information Center n.d.) suggests that other place characteristics touted to amenity-seeking migrants include cost of living, cultural amenities, community ambience, and the service environment (libraries, wellness facilities, access to transportation, etc.). Retiring to the New West When looking at more recent retirement migration trends, one might also surmise that the Sun City stereotype is being challenged. It appears that increasing numbers of retirees are exploring new territory and rejecting the gated Sun City model. One 2006 retirement guide included three non–Sun Belt communities in its list of the top five retirement communities.7 While climate might still be argued to be a predominant feature of migration decisions, it’s clear that retirement to Telluride, Colorado, is not the same as retirement to Tucson, Arizona. J. Matthew Shumway and Samuel M. Otterstrom (2001) provide a fascinating review of the significant demographic trends that have transformed the Old West into the New West. Noting how worldwide competition has led to a decline in extractive industries (mining, ranching, farming, logging), the authors discuss the concomitant job growth related to environmental amenities, specifically tourism, second homes, and retirement (servicerelated industries). They suggest that a fundamental shift in the economy has occurred, involving not the exploitation of natural resources but the exploitation of the natural environment as a place. Interestingly, Shumway and

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Otterstrom note that these quality-of-life factors contribute to population growth (both through in-migration and dampening of out-migration), with jobs following the growth, rather than the other way around. To demonstrate their argument, Shumway and Otterstrom developed a typology of counties in the west, including both dominant economic characteristics and an ‘‘amenity index.’’ Of 246 rural counties in the western states, 76 were classified as New West, differentiated statistically with the highest natural amenity index, the highest amount of service-related employment, and the highest amount of federal land ownership and as major retirement and recreation destinations. New growth has concentrated in these New West counties, often characterized by a somewhat developed infrastructure and extant recreational and scenic amenities. The most intense clustering has occurred in western Colorado, southern Wyoming, and northern New Mexico, where famous destinations and attractions are also in close proximity to metropolitan areas. During the 1990s, the rural Mountain West grew by 700,000 people and, amazingly, 70 percent of rural counties experienced net in-migration. As Wright, Caserta, and Lund (2003) note, ‘‘aging’’ is a major driver of these population and economic changes in the west. Citing U.S Census figures, they observe that between 1990 and 2000, the western region of the United States experienced the highest increase (20 percent) in the 65-andolder population, with Nevada’s older population growing 72 percent and with Las Vegas being the metropolitan area with the greatest increase (65 percent) among all metro areas in the country. Policy makers, citizens, and researchers increasingly have been concerned about the environmental impact of retirement migration to the New West. In their investigation of elders’ attitudes toward protection of the natural environment in Utah, Wright and colleagues observed a diverse set of orientations. A generally positive attitude toward protection of the environment masked a good deal of underlying diversity as to how it should be done. Certain segments of the retirement population maintained a conservative skepticism regarding the role of the government, preferring the task be left to industry and the business community; they exhibited a strong distrust of national environmental groups. Other segments were vocal in their support for stronger protections and more liberal in their approach to environmental issues. Interestingly, the former attitudes were more likely to be evinced by long-term residents, the latter by ‘‘newcomers,’’ who tended to be younger in age, as well, and more heterogeneous in their religious affiliation (less likely to be members of the Church of Jesus Christ of Latter-Day Saints). Wright and colleagues note that the former group may also be more likely to benefit from the economic development in retirement ‘‘hot spots’’ and, hence, less inclined to support growth limits. The diversity in perspectives represents an interesting echo of the more general tensions arising in the New West around environmental issues.

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Wright, Caserta, and Lund suggest that the growing number of baby boomers in the west will add to this heated debate. Insofar as a growing proportion of baby boomers seek civic engagement as well, the potential for a more collaborative conservation movement (balancing local and federal interests) may be enhanced.8 College Towns In another challenge to the Sun City model, an increasing number of retirement migrants are finding their way to college towns. The communities exhibit many of the pull characteristics identified in Walters’s (2002) list: healthy local economies that can support a richer service environment; lower crime rates; quality health care systems, often including teaching hospitals; and, of course, a rich array of low-cost recreational, cultural, and educational amenities. These amenities can outweigh the role of climate in retirement decision making, and as a consequence, many college towns throughout the country have begun concerted efforts to attract retirees. The small city of Columbia, Missouri, certainly not in the Sun Belt, initiated a Retire to Columbia campaign in 1994, advertising in multiple national publications and generating a movement that had attracted an estimated 2,700 new migrants to the city by 2000 (Bernard 2007). Other college towns have followed suit and now aggressively market their amenities to baby boomers and new retirees. Retiring to the City While not a mass movement, there is some irony in the reverse movement of boomers from the suburbs to the cities. In a white paper for the Living Cities Census Series, Eugenie C. Birch (2005) reviews the recent demographics of downtown revitalization efforts nationwide. She notes that residential development has become one of the linchpins of downtown revival strategies. Many downtowns boast a large number of assets that support residential uses. Architecturally interesting buildings, waterfront property, a rich cultural heritage, bustling entertainment sectors, specialized services like healthcare and higher education, and, of course, proximity to jobs are common attributes. (Birch 2005, 2)

As one might infer from the retirement migration research, cities will have strong appeal for amenity-seeking baby boomers. While the growth remains relatively modest, downtown housing is on the upswing and baby boomers are, it appears, helping to fuel the trend. While young adults lead the march, baby boomers (especially empty-nesters and single-person

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households) are not far behind. In 2000, the 45–64 age group comprised 21 percent of the downtown population, a figure that Birch suggests will continue to grow in the future. Will Baby Boomers Seek Sun City? Haas and Serow (2002) have raised a number of provocative questions about whether the baby-boom generation will follow the same patterns of retirement migration as the current generation or will bring an end to the Golden Age of retirement communities. As the previously cited research on migration attests, amenity-seeking retirement has traditionally been based on a clean break with work life and enabled by a solid economic footing. Haas and Serow suggest that there are signs of change on the boomer horizon that might signal new forms of retirement and affect the migration model. THE TIMING OF RETIREMENT For most of the twentieth century, age at retirement exhibited a continuous decline, enabled by improving pension benefits and the availability of Social Security at age 62. By 1985, the average age at retirement had reached 60 and only 18 percent of the age 65–69 population was in the workforce (Gist 2007). This trend certainly helped fuel the creation of the ‘‘golden years’’ model of a leisure-filled retirement. Now it appears the trend has reversed itself. Average retirement age has risen from 60 to 62. Twenty-nine percent of the 60-and-over population are working (Gist 2007). AARP reports that 80 percent of the boomers expect to work at least part-time in retirement, and one in four boomers report they plan to never retire! For the individual worker, however, age at retirement is not always driven by choice. Often, it is driven by need, due to changes in health status or company downturns. When evaluating the prospective retirement ages of boomers, however, we can’t predict these changes. Hence, speculation on when boomers will retire is based on their reported intentions, which sometimes don’t come to pass. Nevertheless, there is strong evidence that boomers will spend more years in the workforce than their predecessors. Social policy makers are thrilled at the prospect, since this will generate tax revenues to help offset the significant pressure on the system over the next thirty years. Gordon Mermin, Richard Johnson, and Dan Murphy (2007) suggest that this likelihood of continued employment might be driven by negative factors, that is, the erosion of traditional defined benefit plans and employersponsored health benefits. Of course, changes in Social Security policy itself also incentivize later retirement. Boomers will be eligible for full benefits at

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age 66, not 65, and the reduction in benefits for early retirement are being increased. When looking at expectations, moreover, there is clear evidence of changing attitudes. Haas and Serow (2002) note that boomers are less likely than current retirees to have followed a traditional career path. Such individuals are more likely to reenter the workforce in postretirement. Similarly, higher educational levels increase the likelihood of continued engagement with the workforce, albeit in consulting capacities or in a part-time capacity. Increasingly, boomers are engaging in entrepreneurial activity, abandoning their traditional careers, and starting up new businesses (Karoly and Zissimopoulos 2004). Many women in the boomer generation have been strongly career oriented, unlike their mothers and grandmothers, and hence more likely to stay engaged with work. As Haas and Serow note, it is from the ranks of the more economically independent early-retirees that the age-dense active retirement communities have been filled. The longer boomers work, the less likely they are to spend their ‘‘active years’’ in Sun City. FINANCING RETIREMENT Aside from the leisure time created through early retirements, the Sun City lifestyle has depended on the solid financial footing of the current cohort, itself a factor of the savings habits of the current generation and the successes of organized labor in improving the financial status of retirees. As mentioned above, the erosion of defined benefit pension plans creates a level of uncertainty regarding the economic well-being of the next generation of retirees. Haas and Serow (2002) observe that defined contribution plans and the more recently popular individual retirement accounts (IRAs) and other annuity-like vehicles depend for their down-the-road value on the performance of equity markets and, as such, are more volatile than the traditional plans of the current generation of retirees. The availability of early withdrawal might also tempt retirees to cash out too early, thus jeopardizing the long-term financing of a retirement lifestyle. When it comes to savings, American households have exhibited a continuous decline, from 10 percent in the 1950s to 3 percent by the mid-1990s (Moore and Mitchell 1997). While baby boomers as a whole are expected to be wealthier than their parents, important subgroups will be doing worse, and relative to the continuation of preretirement lifestyles, boomers may fare worse given inflationary factors (Butrica, Iams, and Smith 2003). On the positive side, risks associated with lower accumulation of wealth among boomers might be offset by the potentially huge intergenerational transfer of wealth from the World War II generation to the boomers, a amount that might reach a trillion dollars (Haas and Serow 2002, 158). Annamaria Lusardi and Olivia Mitchell (2007) report that wealth accumulation for boomers equals that of their parents, but that, again, important subgroups,

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particularly those who don’t plan for retirement, may find themselves facing retirement with very little or no wealth. BOOMER HOUSEHOLDS AND LIFESTYLES Another factor likely to influence the character of retirement migration is the nature of the boomer household itself. Hakan Aykan (2003) notes that lower (and likely later) rates of marriage and higher rates of divorce have combined to lower fertility levels among the baby-boom generation, as compared to the World War II generation, potentially leading to historically high levels of childlessness. Insofar as decisions to migrate, especially with the onset of dependency, are driven by family concerns, it might be reasoned that a greater number of boomers will be ‘‘footloose,’’ without adult children or grandchildren to either provide or receive care. Given the unknowns regarding the timing and financing of retirement, the changing character of households among the baby-boom generation, and the changing locational preferences boomers have already exhibited, it is arguable that the Sun City real estate ventures of the past may not reap the benefits that the population surge itself would promise. Indeed, below we suggest that the most significant changes in the elderscape will not come from relocation but from the prospect that boomers will, in the end, follow their parents’ path and choose to ‘‘age in place.’’9 IF BOOMERS STAY PUT LIKE THEIR PARENTS: THE NEW ELDERBURBIA William Frey (2007), perhaps the leading demographer of aging trends in the nation, suggests that, by virtue of its sheer size, the population of migrating seniors will continue to have an impact on destination communities. However, aging of boomers in existing places ‘‘will dwarf senior migration as a contributor to senior growth in all but a handful of retiree magnet areas’’ (Frey 2007, 19). As Frey suggests, while a subset of boomers pursues amenities in other climes, albeit in new territories, most of the aging ‘‘action,’’ so to speak, will be in the suburbs where boomers already live. Economically dynamic Sun Belt cities such as Las Vegas, Austin, Atlanta, and Dallas have already attracted boomers, particularly to the exurban portions of these large metro areas. In addition, existing suburbs of older cities, such as Los Angeles, New York, Philadelphia, and Chicago, will become considerably older. Other ‘‘fast-gainer’’ areas that have already attracted the presenior (boomer) population include smaller, high-amenity cities such as Santa Fe, New Mexico; Bend, Oregon; and Boise, Idaho. While Rust Belt areas have lost jobs—and as a consequence, boomers—even these areas will see modest growth in the aging population: ‘‘The state with the slowest projected growth in 55-to-64 years olds is New York where their numbers will still increase by 33 percent

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from 2000 to 2010’’ (Frey 2007, 8). In an interesting sidebar, Frey notes that while the presenior population has continued to leave central cities, even a modest reinhabitation of the city may have a positive impact on the health of downtowns, as new urban pioneers tend to have higher levels of education and income (Frey 2007, 15). This finding is echoed in Eugenie Birch’s 2005 study for the Brookings Institution. So if boomers age in place in the suburbs, as Frey suggests, can we envision a new model for the suburb? The ‘‘New Urbanism,’’ with some refinements around the edge, will provide the basic template for the new elderburbia. At its core, the new urban neighborhood challenges the isolation zoning model that defined the mid-twentieth-century suburb, where the functions of work, play, education, and commerce were geographically distanced from the residential household, thus elevating the importance of the automobile as a necessary connecting agent. According to Andres Duany and Elizabeth Plater-Zyberk, the heart of New Urbanism is in the design of neighborhoods, which can be defined by a relatively small number of basic elements: a discernible center; a variety of dwelling types; walkable access to neighborhood shops, services, parks, schools, and other amenities; street connectivity and calmed traffic; prominent vistas reserved for civic purposes and buildings; density sufficient to promote sociality and reduce criminal activity; and neighborhood self-government (Congress for the New Urbanism Charter, 2007). As a movement, New Urbanism has gained momentum.10 Yet, it is not without its critics from both the left and right sides of the political spectrum. Some have suggested the movement is elitist, as most of the prominent developments have attracted homogenous (i.e., white), upper-income, highly educated customers. Some have criticized the movement for its reliance on greenfield development, thus contributing to urban sprawl, despite its advocacy for preservation of green space, higher density, and transitoriented focus. Disability advocates have argued that the New Urbanist design model, with its reliance on traditional architectural housing styles, works against the values of accessibility and visitability. As a market-driven phenomenon, it is likely understandable that the movement has initially oriented itself to a population that has higher income, is more robust, and has more traditional tastes in design. Nevertheless, many of the values elements that underlie the movement are pertinent to the creation of neighborhoods that might be more livable for people as they age. Indeed, New Urbanism is simply one manifestation of a much broader movement towards ‘‘livability’’ being discussed in planning quarters throughout the country. It is worthwhile to dwell on the development of this broad worldwide policy and program shift in attention from the individual elder to the matrix of community. The movement is in fact occurring throughout the world,

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under such rubrics as ‘‘elder-friendly communities,’’ ‘‘communities for all ages,’’ ‘‘livable, lifespan communities,’’ and others. While the elements of an elder-friendly community are stated in various ways, one simple and comprehensive model is offered by the AdvantAge Initiative, a nationwide community planning and development project of the Center for Home Care Policy and Research (Feldman and Oberlink 2003). The AdvantAge Initiative organizes the elements of an ‘‘elder-friendly’’ community into four domains, declaring that an elder-friendly community: 1. 2. 3. 4.

addresses elders’ basic needs optimizes physical and mental health and well-being maximizes independence for the frail and those with disabilities promotes social and civic engagement

The AdvantAge Initiative domains themselves were derived from a series of focus group discussions with elders and community leaders in four diverse U.S. communities. The domains further subsume thirty-three ‘‘indicators’’ of an elder-friendly community that are measured through random telephone surveys and employed as data for citizen-participation planning efforts. The survey has been conducted in more than twenty-five U.S. communities and with a national sample, providing a wealth of comparative data that enable communities to ‘‘benchmark’’ themselves against others and against their own ideals. In the United States, major national organizations have taken up this ‘‘elder-friendly community’’ approach with enthusiasm. The National Association of Area Agencies on Aging and Partners for Livable Communities (2007) have produced Blueprint for Action: Developing a Livable Community for All Ages. Additionally, AARP (2005) has identified ‘‘livable communities’’ as one of its five top priorities for its ten-year social impact agenda and is developing guidebooks, walkable community assessments, and other citizen tools for creating more livable communities. Even the Environmental Protection Agency (2007) has ramped up its efforts to help create elder-friendly communities through its initiative called ‘‘Building Healthy Communities for Active Aging.’’ On a more global basis, the United Nations has also shifted focus to the environmental aspects of aging. It declared 1999 the International Year of Older Persons, with the tagline ‘‘Towards a Society for All Ages,’’ and since then has organized international conferences and research initiatives designed to increase the quality of elder environments in both rural communities and urban areas. In 2002, the Madrid International Action Plan on Aging (United Nations 2002) recommended creating ‘‘enabling and supportive environments’’ (para. 14) as a key focus area, and this is currently being implemented through the World Health Organization’s Age-Friendly Cities Project. In Calgary, Alberta, a comprehensive elder-friendly community development project has been spearheaded by a collaborative of key

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organizations, and its innovative ‘‘senior-empowerment’’ approach has been carefully evaluated. Moreover, these research findings have spurred the development of a cross-national replication model being developed in Adelaide, Australia.11 So if Frey’s (2007) assertion that suburban elders are not likely to move remains true, and if the livability movement gains ground, what kind of redevelopment might we see in existing suburbs? How will existing suburbs be retrofitted to support aging in place? A few predictions are in order. THE BUILT ENVIRONMENT Infrastructure In the future, cities and towns will increase their investments in sidewalk programs, a return to the days when it would be unthinkable to build a neighborhood without sidewalks on both sides of the street. Lighting will become a more important design feature and public policy issue in municipal planning. Lighting for security will be supplemented by low-level lighting of surfaces for safer pedestrian access. Walking trails will be created both for recreational and physical benefits, but increasingly will be utilized to connect isolated suburbs to service centers and adapted for use by threewheelers and motorized carts. Ramps will be an increasingly visible housing feature, and new companies specializing in the construction of creative ramping solutions will emerge, along with others specializing in home modification and adaptation for independent living. More Intense Use of Existing Space Former single-purpose facilities such as schools, libraries, fire stations, churches and synagogues, medical facilities, and even large houses will be challenged to open themselves up to multipurpose functions. These facilities will evolve into neighborhood ‘‘service houses’’ that provide multiple services to elders, and others, in the suburb.12 The facilities will become gathering places for sociality, often organized around the drawing power of good food and coffee.13 In the best of scenarios, these service houses will become ‘‘great good places’’14 that support community through sociality and connect isolated elders with their neighbors and the world. Though sociality will be the glue holding relationships together, the service houses will come to play a vital role as information centers and as points of contact with medical care, day care, rehabilitation and wellness services, and cultural and recreational programs. Accessory housing will add to the intensification of neighborhood life through the development of a wider array of housing options for elders and those who might support them. Municipalities will provide policies and information to support the development of accessory housing options.15

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Accessory housing will not only meet the needs of adult children bringing elders into their midst (‘‘granny flats’’) but also serve elders as a means of supplementing income and providing housing for caregivers. Childless boomers will be less constrained to reserve their legacy for others, so reverse-equity mortgages will become a more common tool that boomers will use to finance structural changes in the home environment. Infill Development Existing neighborhoods and municipalities will seek ways to develop open spaces and even to create open spaces through demolition in order to develop a richer fabric of opportunities and supports for aging in place. Small-lot ‘‘elder cottages’’ will be designed and marketed to elders, with accompanying maintenance agreements for routine gutter cleaning, furnace maintenance, yard care, and so forth, often in partnership with local nonprofits that have access to youth energies such as Boy Scouts, vocational training programs, and others. Elder cottages will, of course, be designed for ‘‘easy living’’ with accessibility features and smart house technologies. Open spaces created in existing neighborhoods will also be made available for creative congregate housing options, including small-scale ‘‘Golden Girls’’ shared housing types, senior and intergenerational co-housing,16 and domestically scaled long-term-care settings such as the innovative Green House model pioneered by William Thomas.17 NEW SERVICES Mobility Given the automobile-dependent design of traditional suburbs, new forms of transportation and mobility will, of necessity, emerge as elders give up their automobiles. Municipalities will begin investing in smaller, quiet, and energy-efficient buses that are able to make tight turns in traditional cul-desacs. New forms of carpooling will emerge, utilizing Internet-based social networking as a tool to assist riders and drivers to connect. Support Services Nonmedical support services, providing assistance with instrumental and other activities of daily living, will see huge growth as boomers reject the nursing home trajectories of their parents. Technology Technologies will be developed to help make existing suburbs work for the next generation of elders. Access to the Internet will support consulting

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careers and new careers in such areas as design, the arts, and mail-order businesses. Social networking sites will support neighborly relationships and the exchange of services.18 Technologies will support remote interaction with family and service providers, utilizing interactive audio, video, and sensor systems. Acute health problems and emergencies will be responded to through the assistance of emergency alert systems. Chronic health problems will be managed through telemedicine services facilitating the two-way exchange of information between householders and medical providers. THE RETURN OF RETAIL One the chief absences of existing suburbs—basic retail—will return, echoing the day of the corner grocery store. Neighborhood multiservice centers will make space available for small retail, even reinventing the live-abovethe-shop lifestyle of past years. In addition to serving walk-in customers, big-box stores such as Wal-Mart, Costco, and others will develop services to deliver specialized orders to neighborhood service centers, with individual customers utilizing the Internet for the assemblage of household shopping lists and the creation of collective neighborhood orders. In the early years of the American suburb, the one-car family meant that the ‘‘little woman’’ found herself homebound, isolated from services. The hucksters, the Jewel Tea man, and the Fuller Brush man all stepped forward to provide an array of products and services in the convenience of the home. Will we not see a renaissance of these services providing valuable supports and access to retail products by those elders similarly homebound by their lack of automobile independence? HOW WILL IT HAPPEN? If, as usually happens in the United States, the market is expected to be the solution to the future needs of elderburbia, we would expect these innovations to appear first in more affluent communities, building up sufficient economies of scale to enable mass customization. The trend is perhaps already evident with the success of such franchise operations as Home Instead, a thriving national provider of nonmedical support services. Elders themselves, where the finances and numbers are sufficient, might develop new collectives to engage in group purchasing of goods and services for their neighborhoods. One early success is the Beacon Hill Village cooperative in Boston, where 350 elders pay $500 annually in a cooperative to provide themselves with supportive services to enable aging in place.19 If consumerism, devolution, and privatization form the model for the future elderburb, we can also assume that the value of individual consumer choice will guide the development of new products and services. Rather than seeing uniform solutions to the housing needs of elders, for example,

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we’ll see the development of multiple niche markets with specialized products, but serving national audiences to achieve economy of scale (Green Houses represent a good example). With innovations initially serving the more affluent, we can anticipate that lower-income boomers will demand that the same ingenuities infuse the development of publicly funded programs—a second wave of change helping create livable communities for those less able to accumulate the resources to support a good old age. We might anticipate, as well, that the evidence supporting the effectiveness of these innovations will be a necessary foundation for their widespread expansion through public policy and funding, itself a harbinger of future research agendas for the academy. FROM AGING IN PLACE TO AGING IN COMMUNITY One leading-edge development among aging boomers is the ‘‘aging in community’’ movement. Pioneers of the movement are promoting an open dialogue about the meaning of aging and old age, suggesting we need to be more conscious of our own aging process and more intentional about the kinds of communities in which we see ourselves growing old. This philosophy has drawn together groups of like-minded boomers and elders to explore the creation of a new life-course/life-space model, sometimes intergenerational in approach. The co-housing movement (senior co-housing and intergenerational co-housing) is perhaps the most obvious concrete manifestation of this vision of eldertopia.20 Yet, as Jennie Keith (2008) has noted, citing multiple examples in the ethnography of age-segregated communities, it is common to observe the emergence of community whenever people come together with both common background characteristics (membership in an age cohort being one) and common challenges (see also McHugh 2007). Community is more often an emergent phenomenon than an intentional one. While the new aging-incommunity movement attracts elders and boomers to intentionally develop new forms of community, it is likely that elders will form community wherever they happen to find themselves. Many have commented that boomers engage in their own forms of denial around the issues of aging, complicated by the ambiguous status of old age as a category of our experience. Marketers to the boomer population are trapped in a curious paradox. They have to segment the population by age, implicitly reinforcing the subject, while simultaneously portraying age as something to be dreaded and avoided (relative to physical changes) or celebrated as a new form of freedom and leisure (relative to lifestyle and location). Perhaps the increasing focus on aging as a phenomenon of place, rather than time, will provide the necessary framework for resolving these ambiguities and, indeed, lead to the creation of good places for boomers to grow old.

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NOTES 1. Some exceptions are Rowles 1983; Rubinstein 1989; Rubinstein, Kilbride, and Nagy 1992; Gubrium 1993; Stafford 2003; and Katz 2005. 2. The distinction was first drawn by the eminent geographer Yi-Fu Tuan (1977). 3. Cultural geographers and some architects have developed a rich literature on space and place, relevant to aging issues and harking back to phenomenological philosophers. See Heidegger 1927; Bachelard 1964; Seamon 2004; Seamon and Mugerauer 1985; Kearns and Gesler 1998; and Alexander, Ishikawa, and Silverstein 1977. 4. Being a full-fledged member of the baby-boom generation, I have adopted the use of first person when discussing the group. 5. A Google search for the word elderburb found no examples, hence it appears to have been coined for this chapter. 6. Marc Freedman (1999) provides a fascinating history of Del Webb and his real estate development company, starting with a risky two-million-dollar Sun City investment in the desert near Phoenix in 1960, which grew to become the seventh largest city in Arizona by 1980. 7. Money magazine’s top five retirement communities for 2006 were Walla Walla, WA; Williamsburg, VA; Holland, MI; Prescott, AZ; St. Simons Island, GA (CNNMoney.com 2006). 8. On the enormous potential for civic engagement among boomers, see Freedman 1999. 9. The term elderscape was coined by Stephen Katz (2005). 10. The Congress for New Urbanism has grown to 3,100 members, and there are 210 New Urbanist neighborhoods under development in the United States. See http://www.cnu.org/history. 11. Research reports and conference papers describing the Calgary/Adelaide project can be found at http://www.elderfriendlycommunities.org/index.php. 12. A northern European concept providing neighborhood services in a central setting. 13. The ‘‘Mather’s—More Than a Cafe ’’ projects in Chicago are exemplary. Small but inviting cafes with good coffee have senior services embedded within, but these are secondary to the primary purpose of serving as neighborhood gathering points for elders and others. See http://www.matherlifeways.com/iyc_inyourcommunity.asp. 14. This is Ray Oldenburg’s (1989) term for those gathering places or ‘‘third places’’ where people hang out with one another. 15. The leading example is Santa Cruz, California, where the municipality has developed enabling legislation and provides consultation to householders in developing accessory units from concept to renting. See http://www.ci.santa-cruz.ca.us/pl/ hcd/ADU/adu.html. 16. More than a hundred senior co-housing projects have been developed in Denmark over the past twenty years. The Danish experience inspired architect Charles Durrett to spread the movement in the United States. Two U.S. senior co-housing communities were completed in 2006 and another in 2007, and nine more are in the discussion or early planning phases, serving a very small but enthusiastic group of spirited elders seeking collective solutions to their housing needs (Durrett personal communication, December 3, 2007).

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17. The first objective (and incidentally positive) evaluation of the Green House program was coordinated by well-known long-term-care researcher Rosalie Kane (Kane et al. 2007). The Robert Wood Johnson Foundation is supporting the proliferation of the model nationwide. 18. The Front Porch Forum uses the Internet to connect neighbors in some very innovative ways. See http://www.frontporchforum.com. 19. For more information on Beacon Hill Village, see http://www.beaconhillvillage.org. 20. William Thomas coined this term. ‘‘Eldertopia is a community that improves the quality of life for people of all ages by strengthening and improving the means by which (1) the community protects, sustains, and nurtures its elders and (2) the elders contribute to the well-being and foresight of the community’’ (Thomas 2004, 302).

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Getting Around: Meeting Aging Boomers’ Mobility Needs LISA J. MOLNAR AND DAVID W. EBY

B

y 2030, the older population in the United States is expected to double to more than 70 million people, with one in five Americans being age 65 and older (U.S. Census Bureau 2006). Much of this growth will come from the aging of the baby boomers, the cohort of Americans born between 1946 and 1964, who in 2030 will be aged 66–84 and will number over 60 million (Knickman and Snell 2002). The baby boomers have had a profound impact on American society and will continue to do so as they age, due to their sheer numbers and the trend toward increased longevity. One important focus of this impact has been in the realm of transportation and community mobility, with most baby boomers having literally grown up with the automobile. Although the baby boomers may differ markedly from their parents in important ways, the starting point for anticipating their transportation needs is to understand the transportation trends among the current cohort of older drivers in the United States. Compared to previous cohorts, older drivers today drive more and longer into old age. For example, older Americans made 77 percent more vehicle trips, spent almost 40 percent more time driving, and drove 98 percent more miles in 1995 than in 1983 (Rosenbloom 2001). This trend is expected to continue with the aging of the baby boomers, although the rate of increase will likely not be quite so dramatic. These increases in driving reflect an upward trend in driver licensing among older

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adults. By 2030, almost all older adults will have been licensed drivers for most of their lives (Rosenbloom 2004). While men have historically had high rates of licensure, this represents a significant shift for women. In 1955, only 55 percent of women over age 75 were licensed, compared to 84 percent of men that age (Spain 1997). In contrast, 94 percent of baby-boom women are licensed, and if baby-boom women retain their licenses into old age at the same rate as men do now, 84 percent of women age 75 and older will be licensed by 2030 (Spain 1997). At the same time, older women in the future will probably continue to be less likely to drive than older men, although the gap will be considerably less than it has been (Burkhardt and McGavock 1999). Collectively, these and other changes in the older adult population will contribute to the increasing use of the personal automobile for transportation and mobility (Hakamies-Blomqvist, Siren, and Davidse 2004), even though reliance on the automobile is already high. Even those less likely to be licensed drivers (older women, the poor, those living alone, and ethnic and racial minorities) depend heavily on others for rides and therefore consider the automobile a significant means of transportation as passengers (Rosenbloom 2004). The traffic safety impact of the aging of the population has received considerable attention (e.g., Transportation Research Board 2004). Early research suggested that older drivers (age 65 years and older) were at higher crash risk per mile driven than all other age groups except the youngest drivers (e.g., McKenzie and Peck 1998; National Highway Traffic Safety Administration 2000). However, there is some evidence that the crash rate per mile driven may be biased upward for older drivers due to their tendency to drive shorter distances (e.g., Hakamies-Blomqvist 2004; Langford et al. 2004; Langford, Methorst, and Hakamies-Blomqvist 2006). This is because people of all ages who travel shorter distances have a greater risk of crash per unit of distance than drivers who travel greater distances (Janke 1991). Several recent studies have shown that when crash rates are corrected for the low-mileage bias, the apparent age-related increase in crash risk disappears (Hakamies-Blomqvist, Raitanen, and O’Neill 2002; Fontaine 2003; Langford, Methorst, and Hakamies-Blomqvist 2006). While questions remain about older drivers’ crash involvement relative to other age groups, older drivers are clearly at increased risk of death and serious injury in a motor vehicle crash (Bedard et al. 2002; Massie and Campbell 1993) due to age-related frailty (Li, Braver, and Chen 2003). As a result, older drivers are likely to be overrepresented in fatal and serious crashes (Hauer 1988; Maycock 1997), and it is predicted that by 2025 more than 40 percent of all fatal crashes may be associated with age-related frailties, with visual and cognitive impairments as major contributing factors (Staplin, Lococo, et al. 2003). At the same time, not all older drivers experience these impairments in the same way or even at all (Dobbs and Carr 2005).

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Like their younger counterparts, most older drivers are reluctant to give up driving. Driving is considered by many to be essential to independence and quality of life (Carp 1988; Kaplan 1995). It provides an opportunity for older adults to stay engaged in their community and to participate in activities that enhance their well-being, particularly in areas where alternative transportation options are limited. A number of recent studies suggest that driving cessation is associated with increased depressive symptoms over time and declines in general psychological well-being (e.g., Fonda, Wallace, and Herzog 2001; Marottoli et al. 1997; Ragland, Satariano, and MacLeod 2005). Two complementary but interdependent goals have emerged with respect to older drivers: to help those who are able to drive safely continue to do so; and to identify and provide community mobility support to those who are no longer able to drive (Molnar, Eby, and Dobbs 2005). These goals essentially represent two ends of an older adult transportation and mobility continuum (see figure 12-1). At one end is safe independent driving, with research and program efforts focusing on crash and injury prevention. At the other end is dependence on nondriving transportation options, with research and program efforts focusing on the maintenance of older adult mobility. Bridging these two ends is the transitioning process from driving to not driving, which encompasses both safety and mobility issues and cuts across many points along the continuum. The remainder of this chapter focuses on the various approaches being undertaken or being considered to achieve the safety and mobility goals for older adults, with special attention to how the baby boomers may differ from current cohorts of older adults.

FIGURE 12-1. The Transportation Continuum

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KEEPING BOOMERS DRIVING FOR AS LONG AS THEY CAN SAFETY DO SO It has been said that baby boomers are the automobile generation—boomers were conceived in cars, grew up in cars, and will be driven to their funerals in cars. On a more serious note, most baby boomers consider driving to be essential to their independence and quality of life. In most industrialized countries, particularly in the United States, personal transportation is closely linked to the automobile. This is due, in part, to the absence of acceptable transportation alternatives (Kostyniuk, Shope, and Molnar 2000), but also to the traditions and values with which baby boomers have been raised. In addition, during the years in which baby boomers were receiving driver licenses (roughly 1961–1981), changes in family structure, suburbanization, and increased vehicle affordability and availability made driving a personal automobile the preferred transportation mode for baby boomers (McGuckin and Srinivasan 2003). A person does not become a dangerous driver simply because he or she has passed a certain age. Instead, it is declines in driving-related abilities that often accompany aging, or arise from medical conditions or the medications used to treat them, that make driving more dangerous. Although these medical conditions can occur at any age, they are more likely to occur as one becomes older. At the same time, there are significant individual differences in the rate of decline and what functions are affected—each individual is unique. Thus, there is widespread agreement that traffic safety efforts should focus on helping older drivers maintain safe driving as long as they are able to do so, rather than on restricting all older drivers simply because of their age (Dickerson et al. 2007; Molnar et al. 2007). Driving is a complex activity that requires people to be capable of effectively performing a number of critical driving skills requiring visual, cognitive, and physical abilities. Recent work at the University of Michigan Transportation Research Institute (UMTRI) resulted in consensus on these skills, based on a comprehensive search of the literature and an expert panel (Eby et al. 2007). The critical driving skills and their definitions are listed in table 12-1. As people age, they may experience declines in visual, cognitive, or physical abilities that compromise their capacity to perform one or more critical driving skills safely (Staplin, Gish, and Wagner 2003). Studies show that while drivers are often aware of these declines, many either are completely unaware of any declines or underestimate their effects on driving ability (Eby et al. 2003; Sundstr€ om 2008), potentially raising the risk of a crash for these individuals. Given the importance of the personal automobile for transportation and the decrease in traffic safety accompanying many age-related declines, traffic safety professionals strive to keep older adults driving for as along as they can safely do so, while also helping individuals transition from driving to

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TABLE 12-1.

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Critical Driving Skills and Definitions

Critical Driving Skill

Definition

Pretrip Planning

Pretrip planning involves all of those things that you can do to make driving easier and safer before you even start your vehicle, such as making sure you are well rested, ensuring that you are not impaired from the side-effects of medications, planning your trip route in advance, and wearing your seat belt. Way finding is your skill in being able to drive places you want to go without getting lost. A driver who is lost can be dangerous because he or she often makes mistakes while driving that can lead to traffic crashes. Yielding involves knowing which vehicles have the right-of-way and waiting until those vehicles have passed before pulling into the road. Proper yielding is important for safe driving because drivers of other vehicles will be expecting you to know who has the right-of-way. Skill in turning the vehicle is a basic part of safe driving. Turning, however, involves more than just using the steering wheel—it also involves approaching and exiting turns at the correct speed. Traffic signs, signals, and pavement markers (such as stop signs) are designed to help traffic move efficiently and safely. They are only effective if people notice them, know what they mean, and respond to them appropriately. Changing lanes involves checking to make sure the traffic lane is free of other vehicles, signaling your intent to change lanes, and then steering the vehicle into the next lane. The most dangerous part of changing lanes is that a vehicle can be in your blind spot. Passing another vehicle involves knowing where passing is legal, being able to judge the speed of oncoming vehicles, and being able to safely accelerate and drive your car around a slower-moving vehicle that is in front of you.

Way Finding

Yielding

Turning

Responding to Traffic Signals/Signs

Changing Lanes

Passing

(Continued)

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Critical Driving Skill

Definition

Observing

An important skill for safe driving is to maintain awareness of what is happening around you. Observing involves both paying attention to what is happening in front of you and also using the vehicle’s mirrors to keep track of what is happening behind you. A person with good observing skills is aware of how traffic is changing and can make appropriate driving adjustments to avoid potentially dangerous situations. An important driving skill is to be able to pull into or across traffic only when there is a large enough ‘‘gap’’ in traffic so that you can safely complete your maneuver. The gap is the length of time in which there is no traffic crossing your intended path and is determined both by the distance between vehicles and the speed they are traveling. Research shows that many crashes are caused by drivers inappropriately judging a gap length. The appropriate driving speed is based on the posted speed limit and the conditions of the roadway. Speeds should be reduced, for example, if the road is slippery. Note that traffic crashes can be caused both by drivers traveling too fast and by drivers traveling too slow Backing up is an important driving skill because it is difficult to see what is behind your car and it can be hard to steer while traveling in reverse. This skill involves being able to use mirrors and to turn your neck and body to see what is behind the vehicle. The lines on the road are designed to show drivers where cars should be driven. Exceeding these lines can lead to traffic crashes. Proper lane position is important not only while traveling in a traffic lane but also while negotiating intersections. Maintaining a proper following distance behind the vehicle in front of you is important for the prevention of rear-end crashes. The proper following distance is determined by the distance between you and the next vehicle, as well as the speed at which you are traveling. With greater travel speeds, a larger distance between vehicles is need for safe following.

Accepting the Gaps

Controlling Speed

Backing up

Maintaining Proper Lane Position

Following

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Critical Driving Skill

Definition

Signaling

Signaling your intent to turn or change lanes is important for safe driving because it lets other drivers and pedestrians know what you are about to do. It is equally important to remember to turn off the signal after you turn or change lanes so that others know you have finished maneuvering. Headlights are important for being able to see while driving at night and during bad weather. They are also important for letting other drivers and pedestrians know where you are when seeing is difficult. Remembering to turn off the bright ‘‘high beams’’ for approaching vehicles is also important for safe driving because the high-beam lights can make seeing difficult for the other driver.

Using Headlights

other transportation options through a number of different interventions. For these individuals to be helped, valid and reliable screening and assessment tools are necessary. Screening and Assessment A critical component to keeping baby boomers safely on the road is identifying declines in abilities and knowing how these declines adversely affect critical driving skills. The impairment in critical abilities due to normal aging and medical conditions include visual, physical, and mental abilities (Staplin and Lococo 2003). The intent of screening is to determine potential functional declines that may result in unsafe driving. The outcomes of screening may lead to more in-depth assessment by a doctor, occupational therapist, or other professional. Screening results by themselves, however, should not be the basis for a decision to stop driving. Effective screening can occur at state motor vehicle licensing agencies (Grabowski, Campbell, and Morrisey 2004; Meuser, forthcoming), in physician offices (Wang et al. 2003), or in an individual’s own home (Staplin and Dinh-Zarr 2006; Eby and Molnar 2005; Eby, Molnar, and Shope 2000; Eby et al. 2003). Licensing agencies have a unique opportunity to screen for fitness to drive because older drivers, like all drivers, must go through a license renewal process. Driver license renewal policies in the United States vary from state to state in terms of the length of the renewal cycle and other renewal provisions (see Molnar et al. 2007). Some states require more frequent renewals for older drivers, while others require in-person renewal, vision tests, written tests, an on-road test, or certification of fitness for older drivers. Despite these requirements, it may be several years between license

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renewals. Licensing agencies, therefore, also rely on records of crashes and violations as well as referrals from health professionals, physicians, law enforcement officers, courts, and families and friends of older drivers to alert them to potentially unfit drivers. Only a few states require physicians to report unfit drivers to licensing agencies, and only about half of the states provide some type of protection from liability for physicians. Many physicians are reluctant to report unfit drivers for a variety of reasons, including negative effects on the doctor–patient relationship, concerns about the low level of reliability of assessments to crash risk, the time-consuming nature and expense of an assessment, physicians not seeing this as their job, and concerns about negative effects on business (Drickamer and Marottoli 1993; Jang et al. 2007; Miller and Morley 1993). Physicians are uniquely positioned to assess driving-related problems as part of more general medical treatment and care. Older drivers may be willing to stop driving voluntarily if advised to do so by their personal physician. However, many physicians report that they are uncomfortable making fitness-to-drive decisions or lack the necessary information to do so (Marshall 2005). In such cases, patients can be referred to other clinicians, especially occupational therapists or certified driving rehabilitation specialists, for more comprehensive evaluation, including both clinical and on-road driving assessment. As described in the recently published Driving and Community Mobility for Older Adults: Occupational Therapy Practice Guidelines (Stav, Hunt, and Arbesman 2006), occupational therapists (OTs) view driving as an occupation and strive to help people to continue to engage in their occupation. Evaluation of driving ability by an OT includes a review of medical and driving history; a clinical assessment of visual, cognitive, and psychomotor abilities; and an on-road driving assessment. Once declines in functional abilities have been identified, occupational therapists can determine whether a return to driving is possible through training and rehabilitation, and what specific remedial activities should be undertaken. Screening can also occur in the home. This type of screening, called selfscreening, has several benefits: it can be completed in private; people may be more likely to complete the screening earlier in disease onset, resulting in earlier detection of functional declines; and self-screening tools are easily and cheaply distributed resulting in wide availability (Eby and Molnar 2005). Three recently developed and complimentary self-screening tools show promise: • AAA Roadwise Review: A Tool to Help Seniors Drive Safely Longer is an interactive CD-ROM based on research by Staplin and Lococo (2003) (see also Staplin and Dinh-Zarr 2006). • The Driving Decisions Workbook, developed by UMTRI, is a paper-and-pencil workbook that directs users to individualized feedback based on how

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they answer questions. Research has shown that scores on the workbook are positively correlated with on-road driving scores and several clinical tests of functional ability. The workbook can be downloaded free of charge at http:// deepblue.lib.umich.edu/bitstream/2027.42/1321/2/94135.0001.001.pdf (Eby and Molnar 2001; Eby et al. 2000; Eby et al. 2003). • SAFER Driving: The Enhanced Driving Decisions Workbook, also developed at UMTRI, is a Web-based tool (http://um-saferdriving.org) requiring users to answer questions about the severity of health concerns they are experiencing due to medical conditions and medications. The website then calculates the effects of the health concerns on critical driving skills and presents users with individualized feedback on how their driving may be declining, what to do to continue driving safely given these declines, and, if appropriate, recommendations for more in-depth assessment. Research has shown that feedback from the website correlates positively with on-road driving scores and an assessment from an occupational therapist. Users also report that the site is easy to use, that the information is useful, and that they discovered declines in themselves of which they were not previously aware (Eby et al. 2007).

Once functional deficits have been identified, there are numerous interventions designed to keep drivers safely on the road and to begin planning for the time when drivers may no longer be able to continue driving safely. These interventions can be classified into three broad categories: driverbased, vehicle-based, and roadway-based. Driver-Based Interventions Education/Training For the baby boomer experiencing declines, he or she may be able to maintain safe driving longer through education and training courses. Educational and training resources vary widely in terms of purpose, format, content, and target audience (e.g., the older drivers themselves, family members, professionals working with older drivers, the general public). Among the programs available to help older drivers overcome or compensate for functional declines are driver refresher courses and on-road driver training programs, exercise and fitness programs, and programs that assess the ‘‘fit’’ between drivers and their vehicles (that is, how they sit in the vehicle and how the vehicle is adjusted) and recommend improvements. Various national organizations offer these courses including AAA (formally known as the American Automobile Association), AARP, the American Society on Aging, and the National Safety Council. There are also numerous courses available from local organizations. While little is known about the impact of driver refresher courses and on-road driver training on actual crash risk, these programs do show promise for increasing drivers’ knowledge of traffic rules and changing driving

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habits, based on self-reports from participants. Research studies, however, are needed to measure objectively the driving performance of participants and to assess the impact of these programs on reducing the risk of a crash. Rehabilitation Some declines, particularly those related to physical abilities, may be reversible through rehabilitation. Fitness training programs have been found to help older people drive more safely by improving range of motion, strength, and stamina. Results from recent studies on the effectiveness of a physical conditioning program (targeting flexibility, coordination, and speed of movement) are quite encouraging (Marottoli 2007; Marottoli et al. 2007). In one of these studies, participants found the program acceptable and maintained their driving performance (as measured through an on-road driving test), while a control group declined in performance (Marottoli et al. 2007). There have also been efforts to train older drivers to overcome some deficits in attention and information processing, although these results have been less promising (Roenker et al. 2003). Of particular interest are the products of several companies (e.g., CogniFit, Posit Science, and Nintendo) that show that cognitive functioning can be improved through cognitive training. What is not known is whether or not these programs can improve the cognitive abilities to the level where they can positively impact the performance of critical driving skills or impact older driver crash risk. Vehicle-Based Interventions Modifications Some declines in driving skills experienced by baby boomers may be able to be overcome by aftermarket modifications to their vehicles. For example, vehicles can be modified to help drivers get in and out more easily, use seat belts, and perform operational driving skills such as steering, accelerating, braking, and using vehicle controls. Many of these modifications can be purchased through automobile supply stores, dealerships, or aftermarket modification companies. The latter are represented by the National Mobility Equipment Dealers Association (www.nmeda.org). Although these modifications are readily available to the baby boomer who can afford them, research has shown that many individuals who could benefit from modifications, and professionals who work with these individuals, are not aware of the available modifications (Silverstein, Gottlieb, and Van Ranst 2005). Many modifications do not require training to be used effectively. Some, however, require special training, such as hand controls for the throttle and brake. The baby boomer thinking about modifications should be assessed by an occupational therapist or, preferably, a certified driving rehabilitation specialist to ensure that the correct modifications are implemented to overcome

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the individual driver’s deficits, that the modifications are made correctly, and that the driver receives proper training. Advanced Technology Current and near-term technologies, often called ‘‘intelligent transportation systems,’’ have the potential for enhancing older driver safety. These technologies include navigation systems, night-vision enhancement systems, distraction management systems, and crash avoidance systems (Dickerson et al. 2007). While any of these systems could be beneficial for the baby boomer, it is the aging population that is most likely to have increased risk from these systems due to increased distraction (Caird 2004). However, if systems are designed to accommodate the declining abilities that are likely with increasing age and how aging drivers will use the systems (Eby and Kostyniuk 1998; Stamatiadis 1998), the systems will most likely benefit users of all ages, a concept known as ‘‘universal design.’’ As with many vehicle modifications, baby boomers will need training on the systems (Caird 2004; Kostyniuk, Streff, and Eby 1997). Roadway-Based Interventions While driver- and vehicle-based interventions target the specific driver experiencing specific functional declines, changes in roadway design and marking can benefit all baby boomers, as well as drivers of all ages (Classen et al. 2006, 2007). A summary of roadway enhancements are provided by the Federal Highway Administration’s Highway Design Handbook for Older Drivers and Pedestrians (Staplin et al. 2001b; see also Staplin et al. 2001a). The guidelines were developed to accommodate common age-related functional declines in vision, cognition, and physical abilities and to address traffic safety concerns in situations where older drivers are likely to have problems—intersections, pedestrian crossings, highway work zones, and nighttime driving. The Highway Design Handbook provides recommendations ranging from increasing the size, brightness, and contrast of roadway signage and pavement markings to completely redesigning intersections. For example, crash data indicate that older drivers have difficulty making left turns at intersections (Staplin et al. 1998). The handbook recommends the use of ‘‘protected left turns’’ to eliminate the conflict between oncoming vehicles and the driver who is making a left turn. This improvement, however, reduces the number of vehicles that can move through the intersection—a situation that is unacceptable at many intersections. If protected left turns cannot be used, the handbook recommends redesigning the intersection to improve drivers’ ability to see oncoming traffic, such as aligning the traffic so that they are slightly offset to improve visibility.

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Some roadway modifications, such as changes in signage, can be implemented across the roadway network at relatively low cost. Other changes, however, are cost-prohibitive for wide-range implementation. Instead, Staplin, Lococo, Byington, and Harkey (2001a, 2001b) suggest that these changes be used in new construction and at locations where crashes are common. Recent work using instrumented vehicles and on-road evaluation of an intersection designed following Highway Design Handbook recommendations have shown safety benefits for older drivers (Classen et al. 2006, 2007). However, as with other interventions described in this section, training for older drivers will be necessary to keep them up-to-date about upgrades in highway design. For example, many parts of the country are implementing roundabouts rather than traditional intersections. In addition to representing a new type of intersection for many drivers, roundabouts also present a new set of signs that can be confusing to drivers who have not experienced them before. Training can and should be provided to maximize the safety and capacity benefits of roadway upgrades. KEEPING BOOMERS MOBILE WHEN THEY CAN NO LONGER DRIVE It has been estimated that each year, more than 600,000 adults age 70 and older stop driving in the United States and become dependent on others to meet their transportation needs (Foley et al. 2002). Currently, about one in five adults age 65 and older does not drive, with those least likely to drive being among the oldest old (age 85 and older), women, African American or Hispanic, unemployed, less educated (never attended college), low income (under $20,000 per year), not living with a spouse or partner, living in an urban area, in fair or poor health, or disabled (Kochera, Straight, and Guterbock 2005). Driving Cessation: A Difficult Decision The process of driving cessation is a complex one. While many of the reasons given by older adults for stopping driving relate to health and medical problems, especially vision (see, e.g., Dellinger et al. 2001; Rabbitt et al. 1996), other factors such as the availability of personal and environmental resources also come into play (see, e.g., Johnson 1995, 1999). Some drivers stop driving suddenly because of a medical condition. For many, however, driving cessation unfolds as a gradual process, as they become increasingly more vulnerable to difficulties in traffic, limit their driving under certain conditions, and drive progressively less than before (Hakamies-Blomqvist and Wahlstr€ om 1998). At the same time, there is considerable variation in how older drivers respond to driving-related problems, what steps they take to continue

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driving safely, and how well they adapt if they are forced to stop driving. For example, many drivers with functional declines restrict their driving to circumstances under which they feel safest, but others do not appear to practice appropriate driving self-regulation (Baldock et al. 2006; Charlton et al. 2006; Stalvey and Owsley 2000). Similarly, while there is evidence that no longer driving is associated with increased depressive symptoms over time (Marottoli et al. 1997), many older drivers are able to successfully transition away from driving, making the adaptations necessary to maintain their community mobility and well-being. Having to stop driving can be traumatic and life changing. Yet, very little is known about the driving cessation process or the transition to not driving. In particular, there has been limited research relative to how driving cessation affects well-being and what role driving restrictions play in the process, as well as what factors might lessen the adverse outcomes that can result from cessation of driving. Research is needed to better understand the process of driving cessation among older adults and to identify factors that might help them successfully manage the transition, especially given the growth in the older adult population and the dependence people have on the automobile. Regardless of what leads to driving cessation, once drivers stop driving, most will be dependent on alternative sources of transportation for several years—for men, about six years, and for women, about ten (Foley et al. 2002). Unfortunately, few people plan for the time when they will no longer be able to drive (Bailey 2004; Kostyniuk and Shope 2003). When the time comes, they often rely on friends and family to drive them (Kostyniuk and Shope 1998), given their strong preference for the personal automobile. At the same time, many become increasingly uncomfortable asking others for rides. Alternative Transportation Options A number of alternative transportation options have been developed to meet the mobility needs of older adults who no longer drive. Among these are traditional public transit (e.g., buses, light rail, trains, and subways), paratransit (demand-response services, including transit services addressing the Americans with Disabilities Act [ADA]), specialized transit services (e.g., those operated by health and human service providers), supplemental transportation programs (e.g., operated by private-sector transit services, community groups, and volunteer groups), and other alternatives such as walking, bicycling, or using small motorized vehicles (e.g., golf carts; Kerschner and Hardin 2006; Suen and Sen 2004). Public Transit The extent to which public transit options are available varies from community to community. There is also considerable variation in terms of how

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aware people are of the services, how difficult the services are to use, and how much they cost. Research by the Beverly Foundation (2004) has identified five attributes of alternative transportation services that determine whether they are ‘‘senior friendly’’: • • • • •

Accessibility Acceptability Adaptability Affordability Availability

As described by the Beverly Foundation, accessibility has to do with whether people can get to and physically use the service. For public transportation buses, for example, this means being able to get to the bus stop, having a safe and comfortable place to wait for the bus, being able to enter and exit the bus, and having the necessary information to plan and complete a bus trip. Acceptability means how well the service meets the personal standards of users relative to such things as cleanliness of the vehicle, safety of the waiting area if there is one, and politeness of the driver. Adaptability refers to whether the service is flexible enough to be responsive to the special needs of individual users, such as accommodating a person in a wheelchair or someone needing to make multiple stops on the same trip. Affordability has to do with whether the costs are within reach of users and if there are options for reducing out-of-pocket costs through such things as discounts, vouchers, or coupons. A major drawback to public transit is that it is not available for much of the population—in one survey, 60 percent reported not having public transportation available within a ten-minute walk of their homes (Kochera, Straight, and Guterbock 2005). Overall, public transit accounts for a small percentage of trips made by older adults, with one study showing that only 1 percent of trips made by older adults were made by transit (Collia, Sharp, and Giesbrecht 2003). Other research has found that about 12 percent of older adults overall report using it within the past year (Polzin and Chu 2005). When public transportation is available, it may not be accessible to many older drivers. Age, health, and disability all have strong impacts on use of public transportation. Analyses of data from the 2001 National Household Travel Survey by the AARP Public Policy Institute (see Kochera, Straight, and Guterbock 2005) indicate that one in three people over age 75 has a medical condition that restricts his or her ability to travel, and one in six of these individuals report that their medical condition limits use of public transportation. Barriers to the use of public buses, for example, include difficulty walking to the bus stop, waiting for the bus to arrive, climbing aboard, standing if no seats are available, and knowing when to get off at their stop

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(Burkhardt et al. 2002). Other reasons reported for not using public transportation include safety concerns, lack of knowledge regarding use, and inconvenience (Coughlin 2001). Paratransit For those individuals of all ages who have a functional impairment preventing them from reaching or using fixed-route buses, the ADA requires public transit agencies to provide complementary paratransit (i.e., demandresponsive transportation services operating within three-quarters of a mile of fixed bus routes). Public transit agencies can also contract with taxis to provide complementary paratransit to accommodate people with disabilities. In addition, specialized transit services may be available—often in form of vans operated by human service and nonprofit agencies—to provide door-todoor transportation. However, the availability of these options is often limited because (1) they are only available where there are regular transit services (and thus not in rural areas), (2) even in urban areas, many do not live close enough to existing bus lines, and (3) most older adults are not eligible for specialized transit because their disability is not severe enough (Rosenbloom 2003). Thus, although paratransit and other specialized services are essential to those who use them, they only account for a small percentage of trips made by older adults (Kochera, Straight, and Guterbock 2005). Efforts to improve the accessibility, acceptability, adaptability, affordability, and availability of alternative transportation options have been undertaken in many communities. These include providing low-floor buses, expanding hours of operation, improving schedule reliability, making it easier for older drivers to enter and exit the bus by reducing physical barriers such as steps, having more seats reserved for older riders, and calling out the names of stops (see Burkhardt 2003; Burkhardt et al. 2002; Kerschner and Hardin 2006; Government Accountability Office 2004). Communities are also providing more user-friendly travel information and training for transit users and providers, using advanced technologies to generate realtime arrival and departure information, involving older adults in transportation planning, and partnering with other community agencies to better serve the specialized needs of older adults. Supplemental Transportation Programs One promising alternative transportation option falls within the general category of supplemental transportation programs (STPs). STPs are community-based transportation programs organized to meet the specialized mobility needs of older adults through trip chaining, transportation escorts, doorthrough-door service, and other means of personal support intended to complement or supplement existing transportation services (Beverly Foundation

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2004). The Beverly Foundation (2004) conducts an annual survey to identify, index, and describe STPs and has collected information on more than four hundred such programs since 2000. These vary considerably in terms of where they are located, how they are organized, ridership, trip purpose, use of escorts, type of vehicle, rider fees, drivers, and funding. Independent Transportation Network Another promising approach to promoting lifelong community mobility is characterized by the Independent Transportation Network (ITN), a shared-cost program that uses paid and volunteer drivers in private automobiles to provide door-through-door services (including help with carrying packages and other items) to adults age 65 and older and adults with visual impairment. ITN (www.itnamerica.org) is membership based—users pay nominal dues, pay for their rides through personal transportation accounts (at roughly 50 percent of the cost), and accrue transportation credits in a variety of ways. Walking and Bicycling For older adults who are relatively physically fit, walking or bicycling may be a viable means of getting around. However, little has been done in the United States to address the need for a safe infrastructure that includes sidewalks, road crossings, and traffic signals for pedestrians and bicycle lanes and road crossings for bicyclists. Without attention to these infrastructure issues, walking and bicycling will continue to hold risk for the older adult population, given their growing numbers in the population and their susceptibility to injury. While older adults may be more likely to consider using alternative transportation options as improvements are made to better meet their needs, current travel trends suggests that the use of alternative transportation has been dropping among older adults—for example, trips based on alternative transportation as a percentage of all trips declined from 2.2 in 1995 to 1.3 in 2001, and there is little indication that the use of alternatives such as specialized paratransit services or subsidized taxis is large or growing among older adults (Rosenbloom 2003). In fact, national transportation data suggest that older adults are less likely to travel in general and to take fewer trips on public transportation than their younger counterparts (ICF Consulting 2006). Thus, barring major changes from current trends, it is unlikely there will be significant growth in transit demand from aging baby boomers, especially given their preferences for travel by automobile and technological advances in driver aids that may allow them to continue driving (Polzin and Chu 2005). Focusing on individual transportation services to make sure they are responsive to the needs of older adults is an important part of promoting

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community mobility. At the same time, the needs and preferences of older adults are quite diverse, and successful efforts to enhance mobility will require a wide range of services and systems. Communities that support such a full range of public and private transportation options—commonly called a ‘‘family of services’’ approach to transportation—have the best chance of meeting the mobility needs of their community members, including older adults (European Road Safety Observatory 2006; National Center on Senior Transportation 2007). CONCLUSION The baby boomers have been defining contemporary society for decades and will continue to do so for many more decades. The aging of the baby boomers has already led to several large-scale efforts to address the transportation needs of older adults, including two Transportation Research Board conferences devoted entirely to aging and driving (Transportation Research Board 1988, 2004), a physician’s guide to assessing and counseling older drivers (Wang et al. 2003), highway design handbooks to accommodate older drivers and pedestrians (Staplin et al. 2001a, 2001b), and several recent federal strategic planning documents that address the needs of older drivers (National Highway Research and Technology Partnership 2002; U.S. Department of Transportation 2003; Volpe Center 2003). Indeed, a recent guide of promising approaches for promoting lifelong community mobility reviews close to two hundred programs and practices intended help maintain safe mobility for older adults (Molnar et al. 2007). As discussed in this chapter, maintaining safe mobility for the aging baby boomers is a complex and challenging issue. As we continue to address this issue, there are several issues to keep in mind. The first is that one’s ability to drive is not based on age, but rather on one’s health status and the medications used to treat medical conditions. Health status is more likely to be poor as a person ages, but not all older adults are in poor health. We also need to remember that each person is an individual who differs in family, financial, and psychological resources. Some are more willing and able to stay safely driving, and others are more willing and able to transition to not driving. Thus, it is critical that concerned drivers seek assessment from people who are specifically trained to evaluate and counsel aging adults on transportation issues. Another issue that we have touched upon in several parts of this chapter is the importance of education and training. Education and training are critical to keeping the baby boomers mobile as they age, whether this involves learning more about one’s own changes in driving abilities; learning about how to use the latest vehicle modifications or advanced technology; staying abreast of the latest traffic laws, signage, and roadway changes; or learning about the options available when one is unable or chooses not to drive. At the same time, education and training are important for those who provide

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services for aging baby boomers, including family members. Perhaps we should begin to view mobility and driver training as a lifelong endeavor. Finally, as described earlier, transportation represents a continuum. All of us are somewhere along this continuum and will eventually be confronted with the same transportation issues. Learning about how to maintain safe mobility in our aging society will be beneficial for all. This is especially true for those who are not experiencing any declines in their ability to perform critical driving skills. For these people, this knowledge is useful for both understanding the issues facing some older adults and planning for one’s own future transportation needs. ACKNOWLEDGMENTS The preparation of this chapter was supported by the Michigan Center for Advancing Safe Transportation throughout the Lifespan (M-CASTL), a University Transportation Center sponsored by the U.S. Department of Transportation and the University of Michigan. The content of this chapter reflects the views of the authors and not necessarily the views of the U.S. Department of Transportation. We thank Jeri Stroupe for her assistance with this chapter. REFERENCES Baldock, M. R. J., J. L. Mathias, A. J. McLean, and A. Berndt. 2006. Self-regulation of driving and its relationship to driving ability among older adults. Accident Analysis and Prevention 38:1038–45. Bailey, L. 2004. Aging Americans: Stranded without options. Washington, DC: Surface Transportation Policy Project. Bedard, M., G. H. Guyatt, M. J. Stones, and J. P. Hirdes. 2002. The independent contribution of driver, crash, and vehicle characteristics to driver fatalities. Accident Analysis and Prevention 34:717–27. Beverly Foundation. 2004. Innovations for seniors: Public and community transit services respond to special needs. Pasadena, CA: Beverly Foundation. Burkhardt, J. E. 2003. Better transportation services for older persons. Paper No. 033843. Transportation Research Record 1843:105–12. Burkhardt, J. E., and A. T. McGavock. 1999. Tomorrow’s older drivers: Who? How many? What impacts? Transportation Research Record 1693:62–70. Burkhardt, J. E., A. T. McGavock, C. A. Nelson, and C. G. B. Mitchell. 2002. Improving public transit options for older persons, vol. 2: Final report. TCRP No. 82. Washington, DC: Transportation Research Board. Caird, J. 2004. In-vehicle intelligent transportation systems: Safety and mobility of older drivers. In Transportation Research Board 2004, 236–55. Carp, F. M. 1988. Significance of mobility for the well-being of the elderly. In Transportation Research Board 1988, 1–20. Charlton, J. L., J. Oxley, B. Fildes, P. Oxley, S. Newstead, S. Koppel, and M. O’Hare. 2006. Characteristics of older drivers who adopt self-regulatory driving behaviours. Transportation Research Part F 9 (5): 363–73.

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Kostyniuk, L. P., F. M. Streff, and D. W. Eby. 1997. The older driver and navigation assistance technologies. Report No. UMTRI-97-47. Ann Arbor: University of Michigan Transportation Research Institute. Langford, J., M. Fitzharris, S. Newstead, and S. Koppel. 2004. Some consequences of different older driver licensing procedures in Australia. Accident Analysis and Prevention 36:993–1001. Langford, J., R. Methorst, and L. Hakamies-Blomqvist. 2006. Older drivers do not have a high crash risk: A replication of the low mileage bias. Accident Analysis and Prevention 38:574–78. Li, G., E. R. Braver, and L. H. Chen. 2003. Fragility versus excessive crash involvement as determinants of high death rates per vehicle mile of travel among older drivers. Accident Analysis and Prevention 35 (2): 227–35. Marottoli, R. A. 2007. Enhancements of driving performance among older drivers. Washington, DC: AAA Foundation for Traffic Safety. Marottoli, R. A., H. Allore, K. L. Araujo, L. P. Iannone, D. Acampora, M. Gottschalk, P. Charpentier, S. Kasl, and P. Peduzzi. 2007. A randomized trial of a physical conditioning program to enhance the driving performance of older persons. Journal of General Internal Medicine 22 (5): 590–97. Marottoli, R. A., C. F. Mendes de Leon, T. A. Glass, C. S. Williams, L. M. Cooney Jr., and L. F. Berkman. 1997. Driving cessation and increased depressive symptoms: Prospective evidence from the New Haven EPESE [Established Populations for Epidemiologic Studies of the Elderly]. Journal of the American Geriatrics Society 45:202–6. Marshall, S. 2005. Assessing medical fitness to drive in the older driver. Elder Care: Issues and Options for Canadian Physicians, 33–35. http://www.cma.ca/multimedia/CMA/Content_Images/Inside_cma/WhatWePublish/LeadershipSeries/English/ pg33EC.pdf. Massie, D. L., and K. L. Campbell. 1993. Analysis of accident rates by age, gender, and time of day based on the 1990 Nationwide Personal Transportation Survey. Report No. UMTRI-93-7. Ann Arbor: University of Michigan Transportation Research Institute. Maycock, G. 1997. The safety of older car users in the European Union. Basingstoke, UK: Foundation for Road Safety Research. McGuckin, N. A., and N. Srinivasan. 2003. Journey to work in the United States, 1960–2000. Report No. FHWA-EP-03-058. Washington, DC: Federal Highway Administration. McKenzie, D., and R. Peck. 1998. Revised Teen and Senior Facts Report confirms previous trends. Research Notes (Spring). Sacramento, CA: Department of Motor Vehicles. Meuser, T. Forthcoming. License renewal policy and reporting of medically unfit drivers: Descriptive review and policy recommendations. Washington, DC: AAA Foundation for Traffic Safety. Miller, D. J., and J. E. Morley. 1993. Attitudes of physicians toward elderly drivers and driving policy. Journal of the American Geriatrics Society 41:722–24. Molnar, L. J., D. W. Eby, and B. M. Dobbs. 2005. Policy recommendations to the White House conference on aging solutions forum. Public Policy & Aging Report 15 (2): 24–27.

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Multigenerational Bonds, Family Support, and Baby Boomers: Current Challenges and Future Prospects for Elder Care JUDITH G. GONYEA

I

n recent years, the aging of the baby-boom generation (those individuals born between the years of 1946 and 1964) has received considerable media attention. Within the world of public policy, both state and national leaders are increasingly grappling with the implications of an older or longer-lived society. Anticipating that the majority of baby boomers will live into their 70s, 80s, and even 90s, much of the media and political spotlight has been cast on the public costs associated with advanced old age, particularly the impacts for our nation’s pension and health care systems (principally Social Security and Medicare). Although there is considerable evidence that today’s elders are faring better than did previous generations, concerns about rising public costs are indeed legitimate, as advanced old age is tied to a greater risk of experiencing economic hardship and disabling illnesses or health conditions. Yet, often missing from this national discourse about the costs of an aging society is a discussion about the impacts on families of this longevity revolution. Such an omission is significant because families represent the backbone of our nation’s long-term care system. Research has consistently revealed that families provide the vast majority of frail and disabled older adults’ social, emotional, and physical care. In this chapter, we explore the current experience and prospects of midlife baby boomers, who are increasingly caring for their frail older parents. To frame our analysis, we begin by examining how recent demographic and social trends have impacted family bonds or connections across generations

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of family members. Next, we examine the challenges and costs that baby boomers confront when they take on the role of caring for older frail family members, as well as the public costs associated with elder care. Finally, we explore the issue of whether a caregiving gap or crisis is looming for our nation. LONGEVITY, LINKED LIVES, AND THE MULTIGENERATIONAL BONDS OF BABY BOOMERS The dramatic increases in life expectancy that have occurred throughout the twentieth century have had profound impacts on both individuals and families. The democratization of the aging experience has led to a life course revolution and has reshaped the concepts of young, middle, and older adulthood (Skolnick 1991). Indeed, as the average life expectancy of Americans has risen, the boundaries of middle age have extended upward. Although the ages of 40 to 60 are typically perceived as middle-aged, for a growing number of Americans middle age is not viewed as ending until age 75. In fact, a third of Americans currently in their 70s choose to describe themselves as middle-aged (National Council on Aging 2000). Increases in life expectancy have also led to middle age becoming the normative life stage in which adult children typically confront the declining health and death of their parents. About 40 percent of baby boomers enter midlife with both parents alive, and 60 percent have at least one living parent; however, 77 percent of boomers will leave middle adulthood with no living parents. This demographic trend of increased life expectancy, accompanied by a trend of declining fertility, has dramatically changed the age structures of most industrialized nations. Throughout the past century, these nations’ age pyramids have become increasingly rectangularized (U.S. Census Bureau 2004). Moreover, this shift from high-mortality/high-fertility societies to low-mortality/low-fertility societies has also changed the age structure of most families from a pyramid to a beanpole (Bengston, Rosenthal, and Burton 1990). In essence, contemporary American families have more generations alive, but fewer members in each generation. Uhlenberg (1996), for example, found that for those born in 1900, only 21 percent had any grandparent living by the time they reached age 30. In contrast, he notes that for those individuals born in 2000, 76 percent will have at least one living grandparent by age 30. As a result of longer life expectancies, the most common family structure for baby boomers is a three-generation family with one or more parents or parents-in-law and one or more children. Noting that what might be lost in a review of macrosocial demographic trends is the specific consequences for individual family members and their chances of receiving family support, Bengston (2001) explored the potential positive and negative consequences of more years of shared living across generations. He suggested that greater years of cosurvivorship between

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generations may offer a multigenerational kinship network to provide family continuity and stability across time. Aging parents and grandparents may increasingly become a valuable resource or a latent network of instrumental and/or emotional support in times of need (Riley and Riley 1996). Yet, longer years of shared living, according to Bengston (2001), may also extend years of family conflict and discord, as well as significantly lengthening the years of caregiving for frail or disabled elderly family members. Indeed, intergenerational family relationships are now of unprecedented duration: siblings may share eight decades of life, parents and children typically share five or six decades, and the grandparent–grandchild bond may last three or four decades. These intergenerational bonds have profound impacts on family life; each family has a culture of its own that is sustained and elaborated upon by generations of members. As Jerome (1994, 8) notes: The family of childhood becomes the family of middle adulthood, which is replaced by the family of old age. The overlap in membership gradually diminishes until in the end the former group of relatives is completely replaced. Arguably, it is still the same family, though, through the handing down of traditions, family ways and items or objects which link present generations to previous ones.

As the above discussion makes clear, individuals’ lives are intertwined with families; thus, it is useful to consider individual development and family development simultaneously. As well, macrosocial demographic shifts may also affect the filial obligations, expectations, and flow of support between generations. BABY BOOMERS AND TRANSFORMATIONS OF THE FAMILY The family, as a social group or institution, moves through time in a constantly changing social and cultural environment. Thus, it is valuable to explore the intersection of individual time, family time, and historical time (Hareven 1978). Indeed, change occurs at three different levels: the developing individual, dyadic relationships within the family, and the institution of the family (Jerome 1994). As Riley, Foner, and Riley (1999) emphasize, changing societies change the life course of individuals, who then during their lives modify society. Birth cohort and social context analysis recognizes the impact of generational differences. Within industrialized societies, a number of demographic and social changes (in addition to the verticalization of the family) have resulted in very different life experiences and options for baby-boomer men and women than those that confronted their fathers and mothers. The babyboom generation entered adulthood with increased educational and labor force opportunities for women, technological advances in reproductive choice, and greater public acceptance of diverse lifestyles and family choices.

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Baby boomers faced unprecedented choices about whether and when to marry; whether to remain married, divorce, or remarry; and whether and when to have children. It is often emphasized that there is growing heterogeneity in life course transitions as baby-boomer men and women move in and out of cohabitation, marriage, parenthood, school, employment, careers, and retirement at widely disparate ages and in different sequences. The life course has become highly individualized, and variability is the new hallmark of adult life. Phenomena that were once clear markers of young, middle, and older adulthood are less predictable, and there is greater diversity in family structure. The baby-boom generation, approximately 78 million strong in the United States, is not a homogeneous group. As Hughes and O’Rand (2004) stress, while the oldest of the early boomers graduated college or began their work careers during the Summer of Love, the youngest of the late boomers finished college or entered the labor force during the Reagan years. They also note that immigration has played a major role in increasing the racial and ethnic diversity of the baby boomers; approximately 12 percent of early boomers and 15 percent of late boomers are foreign born. Although the percentage of African Americans in the United States has not changed substantially in recent decades, the percentages of Hispanics and Asian Americans have increased dramatically (U.S. Census Bureau 2000). Social class is also a powerful determinant of life-course patterns and outcomes. Despite the civil rights and women’s movements, significant inequities continue to exist in income, net worth, and home ownership. The economic divide that has existed between the haves and have-nots among baby boomers is predicted to lead to even greater disparities as this cohort enters the ranks of old age (O’Rand 2002; Dannefer 2003; Gonyea 2005). The baby boomers also experienced the rise of the ‘‘nontraditional family’’ and an overall retreat from marriage in the United States. Although married couples still make up a slight majority of American households, their share of all households has continued to decline, dropping another 10 percentage points between 1980 and 2000. Most of this decline was concentrated among married couples with children, whose share fell from 31 percent to 24 percent during these two decades (U.S. Census Bureau 2003c). With individuals waiting longer to marry or not marrying at all, divorce rates high, and remarriage rates falling, the number of single-person households in the United States reached 26.5 million in 2000 (U.S. Census Bureau 2003a, 2003b). Almost 14 percent of boomers have never married, a percentage which is significantly higher than previous generations (U.S. Census Bureau 2003a). Boomers also have a higher divorce rate than prior generations; it is estimated that approximately half of the first marriages of the baby-boom generation will end in divorce. The median length of a first marriage ending in divorce is eight years. And divorce is a more likely outcome for second

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marriages, as well; approximately 60 percent end in divorce after a median of five or six years (Bramlett and Mosher 2002). Family formation patterns differ markedly for African Americans and whites; African Americans are much less likely to marry, more likely to divorce, and less likely to remarry when divorce occurs. More than 90 percent of white women will marry, compared with 75 percent of African American women. Of those who do marry, African Americans have a substantially greater risk of divorce. Ten years after a first marriage, almost 47 percent of black women have separated or divorced, as compared to 32 percent of white women (Bramlett and Mosher 2002). African American women are also less likely to remarry. After five years of divorce, the probability of remarrying is 58 percent for white women, but only 32 percent for black women (Bramlett and Mosher 2002). The implications of these shifts in family formation and structure for elder care are not yet fully understood. For example, some suggest that as a result of a pattern of serial marriages, aging boomers will have impressive numbers of stepchildren and step-grandchildren on whom they may rely in old age if they become disabled. Yet, others argue that while the step-kin or half-kin gained through marriage or remarriage may increase the size or number of members in one’s latent network, this does not necessarily translate into a willingness to provide needed support or care. In fact, there is mounting evidence that divorce and blended families tend to weaken ties between generations. Based on his analysis of the 2,087 older parents who reported on their 7,019 adult children in the National Survey of Families and Households (NSFH) between 1987 and 1994, Davey found that both mothers and fathers were only half as likely to get support from a nonbiological child (Temple University 2007). As Davey stresses, our society does not yet have a clear set of expectations of the stepchild’s role and responsibilities. There is some evidence that rising divorce rates may already be hurting some elderly parents of baby boomers. Adult boomers who are divorced—particularly women, who financially suffer more than men do from divorce—often have less to give than their married counterparts, both financially and in terms of other forms of support, to their aging parents. Thus, as we look toward the future, there are growing concerns that baby boomers may pay a high price in old age for the soaring divorce rate. Divorced baby boomers, who are less able to give financial and other supports to their adult children, may find in turn that their children will be less inclined to offer them support in their old age. Davey’s analysis of the NSFH dataset revealed that adult children of divorce were less involved with day-to-day assistance later in life for an aging parent, particularly fathers (Temple University 2007). Rises in rates of divorce, nonmarital childbearing, and failure to pay child support have resulted in a significant number of contemporary fathers having weaker ties and relationships with children; these offspring may be less willing to be a safety net for a geographically and/or psychologically distant father (Eggebeen 2002).

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The stark reality is that one-third of baby boomers are entering old age single, whether due to divorce, being widowed, or never marrying. Moreover, the relatively low birthrate among baby boomers means that they will also have fewer children than their parents to call upon in later life. Almost one-fifth (19 percent) of women in their early 40s have no children. While today’s 70- to 85-year-olds have on average 2.4 living biological children, projections suggest that the 70- to 85-year-olds of 2030 will have on average only 1.6 (Wachter 1998). BABY BOOMERS AND TRANSFORMATIONS OF WORK The baby-boom generation has also witnessed the growing intersection of work and family life. Work-family lives—and specifically, women’s work-family lives—have been dramatically altered in the past several decades. Trends in women’s labor force participation patterns underscore how different babyboomer daughters’ lives are from those of their mothers—particularly for white middle-class women. In 1950, about one in three working-age women participated in the labor force, whereas today nearly three out of five women of working age are actively engaged in the labor force (Mosisa and Hipple 2006). Unlike their mothers, paid work has been a major part of their everyday lives for most baby-boomer women. As a result of the dramatic rise in working mothers of preschool and school-age children in the paid labor force, much of the initial public attention was focused on the stresses experienced by young families, particularly around the issue of child care. For example, the percentage of mothers, with children under age 6, who were employed has risen from 39 percent in 1975 to 63 percent in 2005 (Mosisa and Hipple 2006). However, with the aging of the U.S. workforce, public discussions of work-family stress and/or the need for greater work and family-life balance have broadened to include elder care. Using the 1999 National Long-Term Care Survey (NLTCS), the Center on an Aging Society (2005) at Georgetown University found that almost a third (32 percent) of all primary family caregivers for adults aged 65 and older were in the paid labor force. The vast majority of the caregivers—86 percent—were between the ages of 35 and 64. Focusing on primary caregivers of working age (25 to 64 years old), the Center’s analysis revealed that 58 percent were employed, and most of those (83 percent) were working full-time. The vast majority of these working caregivers were adult children (77 percent), typically adult daughters. Given their earlier life pattern of combining childrearing with paid employment, it is unlikely that the vast majority of baby-boomer women will opt out of the labor force to care for aging parents. Labor force participation rates of older Americans are already increasing. About one-third of men and one-quarter of women aged 65–69 are currently in the paid labor force (FIFARS 2006). In fact, surveys consistently reveal that baby boomers

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are planning to continue to engage in paid employment during their retirement years. An AARP (2003) survey of workers over the age of 45, for example, shows that almost 70 percent of adults plan to continue working in retirement at least on some basis. While many baby boomers stress that they will continue to work in their retirement years out of interest or enjoyment, Hacker (2006) argues that the rising economic insecurity of middleclass families will make paid employment in retirement a necessity for many older Americans. Fears about slipping down the rungs of the economic ladder will keep many baby boomers—even those with elder care responsibilities—in the workforce for a greater number of years. THE NATURE AND COST OF ELDER CARE FOR FAMILIES Prior to the 1980s, family caregiving for older members was largely invisible and often assumed to be nonexistent. However, pioneering work undertaken by researchers such as Ethel Shanas (1979) and Elaine Brody (1985) began to refute the prevailing social myth of families’ abandonment of their elders and introduced instead the notion of parent care as a normative family stress. In fact, in the past three decades, research has consistently documented the central role that families play in the lives of older frail relatives. However, estimates of the numbers of families actively engaged in caregiving vary widely, depending on the definition of caregiving used. The 2004 National Alliance for Caregiving (NAC) survey, for example, estimated that 16 percent, or 33.9 million, of American adults are caring for an elder. In the NAC survey, the estimate included individuals caring for any relative or friend aged 50 or older, including those free of a chronic disability, in the prior twelve months. In contrast, the National Long-Term Care Survey (NLTCS) defined an informal caregiver as an individual providing help with one or more activities of daily living (ADLs) or instrumental activities of daily living (IADLs) because of the elder’s health and/or disability for at least three months. Based on this more restrictive definition, slightly less than 2 percent of the U.S. population aged 15 and older was viewed as actively engaged in elder care; an additional 7 percent was labeled potential family caregivers (Spillman and Pezzin 2000). The importance of the parent–child bond across the life course is demonstrated by the fact that adult children represent the largest group of caregivers for disabled elders. According to the 1999 NLTCS, the primary caregivers were children (41.3 percent), spouses (38.4 percent), and other family members and friends (20.4 percent) (Wolff and Kasper 2006). Yet, among adult children, there is a significant gender difference as to who takes on the primary caregiver role. Daughters were twice as likely to be the primary caregiver as were sons. In the NLTCS, three-quarters of the adult child caregivers were daughters. In fact, one of the most consistent findings in family research is that the vast majority of caregivers for relatives with chronic illnesses or

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disabilities are women. Although male and female roles within American families have changed over the past several decades, women are still the primary nurturers, kinkeepers, and carers of family members (Hooyman and Gonyea 1995). The NLTCS also revealed that these adult children were providing, on average, twenty-five hours per week of assistance. And, despite the fact that half of these adult child caregivers were employed, almost half (48 percent) were going it alone without additional support from other family members, friends, or paid help (Wolff and Kasper 2006). The nature of the tasks family caregivers perform is often characterized in terms of ADL and IADL assistance. ADL assistance refers to help with the basic ‘‘activities of daily living’’ such as feeding, bathing, and dressing, while IADL assistance focuses on help with ‘‘instrumental activities of daily living,’’ for example, housecleaning and cooking. As table 13-1 reveals, the 2004 NAC-surveyed family caregivers were more often providing help with IADLs than with ADLs. About 80 percent of family caregivers provided help with three or more IADLs, and 50 percent of them provided ADL assistance. However, this ADL–IADL dichotomy fails to capture the complexity and details of the work many family caregivers do, particularly in terms of the behavioral supervision of their loved ones, attention to pain management, and interactions with health care organizations (Levine 1998; Bookman and Harrington 2007). As Bookman and Harrington (2007, 1005) stress, family caregivers act as ‘‘geriatric case managers, medical record keepers, paramedics, and patient advocates to fill dangerous gaps in a system that is uncoordinated, fragmented, bureaucratic, and often depersonalizing.’’ TABLE 13-1.

Percentage of Family Caregivers Helping with IADLs and ADLs

Instrumental Activities of Daily Living (IADLs) Transportation Grocery shopping Housework Managing finances Preparing meals Helping with medication Managing services

82% 75% 69% 64% 59% 41% 30%

Activities of Daily Living (ADLs) Getting in and out of beds and chairs Getting dressed Helping bathe or shower Getting to and from the toilet Feeding care recipient Dealing with incontinence diapers

36% 29% 26% 23% 18% 16%

Base: 1,247 caregivers in the United States. Source: National Alliance for Caregiving and AARP (2004).

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Families can derive a great deal of satisfaction or personal gratification from caring for an older, frail relative; however, there is ample evidence that these responsibilities can also take a toll on caregivers’ physical and mental health. Although caregiving is not universally distressing, numerous studies have found that, compared to their noncaregiver counterparts, caregivers are at increased risk for stress, insomnia, fatigue, depression, anxiety, and stressrelated illnesses (Berg-Weger, Rubio, and Tebb 2000; Bedard et al. 2000; Connell, Janevic, and Gallant 2001; Pinquart and Sorensen 2003a, 2003b). In the NAC 2004 survey, slightly more than half (51 percent) of caregivers reported having less time for family and friends than before taking on caregiving responsibilities; 40 percent cited having given up vacations, hobbies, or social activities; and 26 percent engaged in less exercise than before. Families often incur out-of-pocket expenses as they support their older relatives. In 2007, NAC, in collaboration with Evercare, conducted an indepth study of the financial aspects of caregiving through a nationwide random-digit-dialed telephone survey of 1,000 caregivers (Evercare and the National Alliance for Caregiving 2007). Their findings revealed that the average out-of-pocket cost of caring for an aging parent or spouse was $5,531 annually, a figure which represented more than 10 percent of $43,026 median income of the surveyed caregivers. The most common expenses that caregivers incurred were for household goods and food (42 percent), medical copayments and drugs (31 percent), clothing (21 percent), and home repair and maintenance (13 percent). About four out of every ten surveyed individuals reported that caregiving expenses had increased their financial worries; as table 13-2 reveals, a substantial percentage had to make changes in their own budgets to accommodate these elder care costs.

TABLE 13-2. Caregiving

Percentage of Family Caregivers Using Strategies to Compensate for

Cut back on spending for hobbies and leisure activities Cut back on vacations or travel Reduced or stopped saving for own future Used savings Deferred major purchase or home improvement Cut back on basic home maintenance Cut back on other necessities such as clothing, transportation, or utilities Cut back on spending for groceries Cut back on own spending for health or dental care Reduced or stopped saving for children’s future Took out a loan or increased level of credit debt Base: 1,000 caregivers in the United States. Source: Evercare and National Alliance for Caregiving (2007).

49% 47% 38% 34% 34% 32% 27% 25% 23% 18% 17%

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TABLE 13-3. Percentage of Employed Family Caregivers Making Workplace Modifications Had to go in late, leave early, or take time off Had to take a leave of absence Had to go from full-time to part-time Had to give up work entirely Lost some of job benefits Had to turn down a promotion Chose early retirement

57% 17% 10% 6% 5% 4% 3%

Base: 935 employed caregivers in the United States. Source: National Alliance for Caregiving and AARP (2004).

Caregiving responsibilities also impact individuals’ paid work lives. Slightly more than half (52 percent) of the employed adult children in the 1999 NLTCS reported experiencing a conflict between their paid work and elder care. To resolve these conflicts, 42 percent rearranged their work schedules, 26 percent worked fewer hours, and 23 percent took time off without pay (Wolff and Kasper 2006). Employed caregivers in the 2004 NAC survey also experienced conflicts in performing these two roles simultaneously. Similar to the NLTCS finding, the most frequent adjustment was a modification in a work schedule; however, as shown in table 13-3, some NAC-surveyed caregivers had to make greater workplace adjustments or sacrifices, including leaving the paid workforce. Employees’ caregiving responsibilities also have an economic impact on U.S. businesses. According to the MetLife Caregiving Cost Study, productivity losses to American businesses as a result of informal caregiving were estimated to total $33.6 billion in 2004. These productivity costs were associated with replacing employees, absenteeism, care crises, work interruptions, supervisory time, unpaid leave, and reducing hours from full-time to parttime (MetLife Mature Market Institute and the National Alliance for Caregiving 2006). Finally, it is important to recognize the longer-term financial impacts of caregiving, particularly for women who, more often than men, reduce their time in the paid labor force to care for children and elderly relatives. Approximately one-quarter of women in the labor force are in part-time positions. Working part-time not only leads to lower annual wages but also reduces eligibility for workplace benefits, including employer-sponsored pension plans. In addition, women spend an average of twelve years out of the workforce caring for children and aging parents. Fewer years in the workforce translates into fewer years of saving and participation in work-based pension programs. Not only were older men twice as likely to have a pension than older women (44 percent vs. 23 percent) in 2004, but men’s median pension

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income was slightly more than twice that of women’s ($12,000 vs. $5,880) (Wu 2006). As Moen (2001) suggests, individuals live ‘‘linked lives’’—that is, ‘‘individuals’ life paths are played in tandem with the life courses of parents, spouses, children, friends, and co-workers’’ (2001, 181). At midlife, baby boomers often confront the declining health and vulnerabilities of their aging parents. Particularly for adult daughters, who are more likely than adult sons to assume the primary caregiver role, these elder care responsibilities may also take an emotional, social, and even financial toll on their lives. BABY BOOMERS AS THE SANDWICH GENERATION As a result of the changing age structure of American families, increasing attention has been cast upon baby boomers as the ‘‘sandwich generation.’’ As Ward and Spitze (1998, 647) note, there are two meanings to this term: Structurally, it refers to middle-generation cohorts sandwiched between older and younger cohorts in the population. Individually, it refers to persons in middle adulthood who simultaneously have relations with their adult children, as they enter and adjust to adulthood, and their parents, as they deal with issues of later life. Members of this sandwich generation are presumed to face potential stresses from the combined and perhaps competing demands of their intergenerational roles as parents and children.

However, recent research has raised questions about the size of this phenomenon. Using the 1994 NLTCS dataset, Spillman and Pezzin (2000) found that only small percentage of either mothers (9.1 percent) or fathers (5.6 percent) with children under the age of 15 were the primary caregiver for a disabled elderly spouse or parent. Similarly, a study of twelve European Union nations found that only 10 percent of women and 4 percent of men aged 45–54 had overlapping responsibilities for children and older adults who required care (Hagestad 2000). While it appears that fewer members of the sandwich generation are simultaneously engaged in caring for young children and aging parent, those who find themselves in this situation may, in fact, experience considerable stress in balancing these dual responsibilities. Moreover, others stress that we should look more broadly at the effects of the dual occupation of the parent and adult child roles, particularly in terms of shifting parental responsibilities to young adult children. In industrialized societies, including the United States, young adults in their 20s are increasingly allowed a prolonged period of independent role exploration, which has correspondingly led to a prolonged parenting phase for baby-boomer parents. Arnett (2000) suggests that ‘‘emerging adulthood’’ should be viewed as a new life stage. He notes that it is the only period of life in which nothing is normative demographically. Almost all American youth from 12 to 17 years of age live at home,

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are enrolled in school, and are unmarried and childless. In contrast, emerging adults’ lives are quite diverse; about one-third go off to college, another 40 percent move out of their childhood home for independent living and work, and about 10 percent of men and 30 percent of women remain at home until they marry. Many baby-boomer parents are actively engaged in helping their children as they explore choices in love, work, and transition to adulthood. Baby boomers often report advising, guiding, and worrying about their children’s life choices. In fact, some suggest that the baby-boom generation’s involvement in their children’s lives has tipped to overengagement and has led to ‘‘permaparenting’’ or ‘‘helicopter parenting’’ (Paul 2003). It is estimated that about 40 percent of young adults return to their parents’ home after moving away, at least on a temporary basis. (Goldscheider and Goldscheider 1994). Historically, the number of ‘‘boomerang’’ or ‘‘B2B’’ (back-to-bedroom) children rises when the economy declines. In 1970, less than 8 percent of young adults between the ages of 25 and 34 were living in their parental home; by 2000, this figure had risen to 10.5 percent, or nearly 4 million of this age cohort (Greiber 2001). Yet, even when their children do not return home, in an era of rising costs, there may be growing expectations for assistance from the middle generation as younger families seek to buy a first home or cope with the expenses of child care (Goldscheider, Thornton, and Yang 2001). Thus, the baby boomers may find themselves in an expensive sandwich dilemma—that is, supporting their offspring and caring for aging parents while attempting to save for their own retirement years. Many baby boomers have added another layer to the sandwich—that is, grandchildren. Although the popular image of grandparents is as frail older adults, the average age for becoming a grandparent in the United States is 48. Most first-time grandparents are in their early 50s, the average age being slightly older for men than for women and for whites than for African Americans (Aiken 1998). Every day, four thousand Americans—primarily baby boomers—become first-go-’round grandparents. The number of grandparents is expected to reach 80 million by 2010. Moreover, given longer life expectancies, most can expect to be grandparents for thirty to forty years (AARP 2002). Thus, the baby-boom generation is quickly becoming the ‘‘club sandwich generation.’’ The transition to the role of grandparent, as well as the experience of grandparenting itself, varies by life circumstances. For example, factors that have been identified as predictors of grandparent–grandchild contact include: geographic distance, quality of the grandparent–parent relationship, number of grandchild sets, grandparent gender, lineage of the grandchild set, and grandparent marital status (Uhlenberg and Hammill 1998). Yet, most research suggests that adults derive considerable pleasure from the grandparent role. The grandparent–grandchild relationship is second in emotional importance to the parent–child bond. It has been suggested that

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baby boomers will reinvent grandparenting. Not only will grandparenting be a different experience for baby boomers than from previous generations as a result of there being more generations to support (i.e., the club sandwich), but baby boomers more often face long-distance relationships and families that have experienced divorces, remarriages, and blended members. Divorce and remarriage have led to many children having six to eight adults in a grandparent role in their lives. Approximately one-fifth to one-quarter of grandparents will be step-grandparents either through their own or their adult children’s divorces and remarriages. Baby-boomer grandparents are also supporting their adult children and grandchildren, who are increasingly finding their households financially strained or strapped. According to AARP’s 2002 nationwide survey of grandparents over the age of 50, 45 percent helped pay for living expenses and 25 percent contributed to their grandchild’s medical or dental costs. Slightly more than half reported helping to pay for their grandchild’s education (AARP 2002). In fact, more grandparents are living with their grandchildren in multigenerational households. The 2000 U.S. Census revealed that there were 3.9 million multigenerational households in the United States; this represents an increase of 76 percent in the past twenty-eight years (Simmons and Dye 2003). Almost two-thirds of these households consist of grandparents, their child(ren), and grandchild(ren). However, the most significant growth has been in households consisting of grandparents and grandchildren only. Approximately one-third of grandparent caregivers were living in ‘‘skipped generation households’’ without the presence of the parents of their grandchildren. These grandparents often become the primary caregivers due to events in the parent generation’s life such as divorce, drug addiction, incarceration, illness, or death (Fuller-Thompson, Minkler, and Driver 1997; Simmons and Dye 2003). More than one-quarter of grandparent-raised children live in poverty, and slightly more than six out of ten children living in a grandmother-headed household are poor (Simmons and Dye 2003). Given longer life expectancies, many baby boomers anticipate that they will care for their aging parents well into their own, and their spouse’s, later years of life. In essence, baby boomers will become the young-old caring for the very old. Although chronological age of older adults is an imperfect indicator of health status given inter-individual variation, rates of chronic disease and disability do rise substantially with advanced old age (SantosEggimann 2002). Approximately 82 percent of Medicare recipients aged 85 and older have at least two chronic health conditions, and 33 percent rate their health as poor (Centers for Medicare and Medicaid Services 2003). The most common chronic health conditions among the elderly are arthritis, hypertension, heart disease, cancer, and stroke. Seniors aged 85 and older are also more likely to have Parkinson’s disease, Alzheimer’s disease, or a broken hip (Centers for Disease Control and Prevention and the Merck

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Company Foundation 2007). These chronic health problems can diminish the quality of life for the affected elders and their families. They can cause years of pain and restrict individuals to performing the basic activities of daily living. While only 3 percent of noninstitutionalized persons aged 65–74 report problems performing ADLs, this figure rises dramatically to almost 23 percent of community-based elders age 85 and older (Centers for Disease Control and Prevention and the Merck Company Foundation 2007). Cognitive impairments, particularly Alzheimer’s disease and other dementias, can also dramatically compromise families’ quality of life. By age 85, almost one out of every three individuals reports having at least a moderate problem with memory loss (FIFARS 2006). Finally, because higher rates of depression are correlated with poorer physical health and greater functional limitations, 15 percent of men and 22 percent of women age 85 and older were found to have clinically relevant depression symptoms (FIFARS 2006). Thus, just as they begin to confront their own declining financial and physical resources (and become the young-old), baby boomers may find their caregiving responsibilities to increasingly frail and disabled parents (the very old) escalating. As the above discussion makes clear, baby boomers increasingly have complex, multigenerational families. Over the next several decades, baby boomers will continue to enter the ranks of our nation’s older population, but they will also still have aging parents. In essence, the children caring for the elderly will increasingly be elderly themselves. The vast majority of baby boomers will experience old age sandwiched between still-living parents, children, and grandchildren. A LOOMING CAREGIVING CRISIS Most experts agree that the United States is in the midst of a growing elder care crisis. While a significant number of frail older adults living in the community currently go without the help they need, it is anticipated that this ‘‘care gap’’ will only widen as baby boomers join the ranks of America’s older population. Although this chapter focuses on family care, family (or informal) care and paid (or formal) care are not two separate worlds. Our nation’s failure to address the labor force shortage of paid, direct care workers—whether through paying a living wage, enhanced training, and/or creating career ladders for the individuals who occupy these positions—means that family caregivers are, and will be, increasingly asked to shoulder a greater load. However, as emphasized throughout this chapter, the convergence of several trends will make it increasingly difficult for families to provide these needed levels of care. As a result of longer life expectancies, we are increasingly becoming a long-lived society. Moreover, the most rapid increase in the 85-plus population will occur between 2030 and 2050 when the baby-

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boom generation becomes the very old. The Census Bureau’s population projections suggest that by the middle of the twenty-first century, over 40 percent of adults age 65 and older can expect to live to at least the age of 90 (He et al. 2005). While these gains in life expectancy are being heralded, we must acknowledge that advanced old age is associated with more chronic health conditions and greater functional limitations. Furthermore, the supply and availability of family caregivers is affected by changes in the U.S. labor force, most notably the entry of women into the paid labor market. Women of all ages are now juggling the dual demands of paid employment and family. In fact, many in the middle generation are finding themselves trying to simultaneously cope with the needs of children and aging parents as they confront their own aging. And finally, shifts in American families’ structures and living arrangements have resulted in a growing number of older adults living alone. While demographic trends and the aging of the baby-boom generation have generated a great deal of media attention, ironically, the increasing number of families who will be providing elder care, and the strains of that care on families, have not. Why has the looming caregiving crisis received relatively little public attention? An International Longevity Center–USA (2006, ix) task force suggests that an underlying combination of ageism and sexism has contributed to the issue’s lack of high public visibility: ‘‘Older care recipients are deemed disposable and without value, and women continue to be the primary caregivers of family members. Like other unpaid work, their contribution is not included in national income accounts.’’ While we, as a society, have rejected the myth of families’ abandonment of their frail elders, the many contributions of family caregivers continue to go largely unrecognized. This invisibility has led Bookman and Harrington (2007) to describe family caregivers as a ‘‘shadow workforce’’ in geriatric health care. Suggesting that family caregivers are socially and politically invisible primarily because their labors remain outside the market economy, Arno, Levine, and Memmott (1999) set out to estimate the national economic value of informal care. Using national datasets, they estimated that 25.8 million caregivers provided a weekly average of 17.9 hours of help, for a total of 24 billion hours of caregiving in 1997. Using a midrange wage rate of $8.18 per hour, the national economic value of this informal caregiving was calculated to be $196 billion. More recently, in 2006, the AARP Public Policy Institute attempted to calculate the economic value of family caregiving in the United States (Gibson and Houser 2007). Table 13-4 presents AARP’s range of estimates based on low (30 million) and high (38 million) estimates of the number of caregivers and four different hourly wage formulas. Using a middle range estimate of 34 million caregivers providing 1,080 hours of assistance yearly (or 21 hours of care per week) at the midpoint hourly wage rate of $9.63, the national

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TABLE 13-4.

THE BOOMERS AND THEIR FUTURE

Annual Economic Value of Unpaid Caregiving Activities in 2006 Number of Caregivers

Cost of Caregiving per Hour High ($19/hr)—average private pay cost of hiring a home health aide Medium ($14.70/hour)—average wage for aides and other workers in the home health industry Low ($9.04/hr)—median wage for all home health aides Very Low ($5.15/hr)—federal minimum wage

High Estimate (38 million)

Low Estimate (30 million)

$780 billion

$616 billion

$603 billion

$476 billion

$371 billion

$293 billion

$211 billion

$167 billion

AARP Public Policy Institute estimate, assuming 34 million caregivers and a cost of $9.63 per hour (the average of the medium, low, and very low costs per hour) = $354 billion. Note: Assumes 1,080 hours of care per year. Source: Gibson and Houser 2007.

economic value of family caregiving in 2006 was estimated to be $354 billion (Gibson and Houser 2007). In fact, studies estimating the value of informal home care have consistently found that it exceeds the costs of paid home care (LaPlante, Harrington, and Kang 2002; Arno, Levine, and Memmott 1999; Gibson and Houser 2007). Arno and his colleagues (1999), for example, noted that the $196 billon estimated value of informal care in 1997 dwarfed the $32 billion spent for formal home health care and the $83 billion cost of nursing home care in that same year. To benchmark the $350 billion estimated value of family care in 2006, AARP compared this figure to the $342 billion spent on total expenditures for the Medicare program in 2005 (Gibson and Houser 2007). Clearly, the family remains the backbone of our nation’s long-term care system. Moreover, the formal health care system benefits from informal care by not having to expend public health dollars. Informal caregiving, for example, has consistently been shown to help delay or prevent the use of nursing home care. According to the American Association of Homes and Services for the Aging, seniors who have an informal caregiver have a five times better chance of remaining in their homes. However, concerns about the public costs of health care (i.e., Medicare and Medicaid) exceeding economic growth, coupled with a looming national budget crisis, have raised fear among some experts that elder care responsibilities (or costs) will increasingly be shifted onto the informal care system. For example, the trend toward shorter hospital stays for Medicare patients means that families are increasingly being asked to perform complex and technical care responsibilities. The average length of hospital stays for Medicare patients has declined

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from 11.7 days in 1973 to 5.5 days in 2004 (Gibson and Houser 2007, 6). The average number of Medicare home health visits per user has also declined from seventy-three visits in 1996 to twenty-seven visits in 2005 (Gibson and Houser 2007, 7). To date, the public outcry regarding this trend to increasingly shift care responsibilities onto families has been relatively weak. This may be partly due to the fact that families generally lack a strong collective political voice. When families advocate for public resources, they typically do so around a specific disease (i.e., Alzheimer’s disease, Parkinson’s disease) and their focus is more often directed toward generating research dollars to search for the etiology of, and a cure for, the disease or for better medical treatment. Nor have family caregivers strongly aligned themselves with direct paid workers, who as predominantly lower-income women and/or women of color, also lack political power. Yet, as the editor of this volume has suggested, a ‘‘perfect political storm’’ is brewing. Baby boomers are assuming increasingly prominent political roles; however, they are doing so in an environment in which growing economic and political pressure is being brought to rein in age-related public expenditures. As we look to the future, we can anticipate that the growing disparity between the demand and supply of caregiving services—both informal and formal services—will only worsen as the baby-boom generation ages. A key question is whether baby boomers will mobilize their political resources on behalf of informal and formal caregivers. As our nation debates constructing a better long-term care system, will baby boomers argue that for both moral and economic reasons it is essential that we as nation develop policy provisions that support the caregivers who are the backbone of this system? REFERENCES AARP. 2002. The grandparent study 2002 report. Washington, DC: AARP. Available at http://assets.aarp.org/rgcenter/general/gp_2002.pdf. Aiken, L. R. 1998. Human development in adulthood. New York: Springer. Arnett, J. J. 2000. Emerging adulthood: A theory of development from the late teens through the twenties. American Psychologist 55:469–80. Arno, P. S., C. Levine, and M. M. Memmott. 1999. The economic value of informal caregiving. Health Affairs 18:182–88. Bedard, M., D. Pedlar, N. J. Martin., O. Malott, and M. J. Stones. 2000. Burden in caregivers of cognitively impaired older adults living in the community: Methodological issues and determinants. International Psychogeriatrics 12:307–32. Bengston, V. L. 2001. Beyond the nuclear family: The increasing importance of multigenerational bonds. Journal of Marriage and the Family 63:1–16. Bengston, V., C. Rosenthal, and L. Burton. 1990. Families and aging: Diversity and heterogeneity. In Handbook of aging and the social sciences (3rd ed.). ed. R. H. Binstock and L. K. George, 263–87. San Diego: Academic Press.

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Berg-Weger, M., D. M. Rubio, and S. S. Tebb. 2000. Living with and caring for older family members: Issues related to caregiver well-being. Journal of Gerontological Social Work 33:47–62. Bookman, A., and M. Harrington. 2007. Family caregivers: A shadow workforce in the geriatric health care system? Journal of Health Politics, Policy & Law 32:1005–41. Bramlett, M. D., and W. D. Mosher. 2002. Cohabitation, marriage, divorce, and remarriage in the United States. Washington, DC: Department of Health and Human Services. Vital and Health Statistics 23 (22). Available at http:// www.cdc.gov/nchs/data/series/sr_23/sr23_022.pdf. Brody, E. M. 1985. Parent care as normative family stress. Gerontologist 25: 19–29. Brown, K. 2003. Staying ahead of the curve 2003: The AARP Working in Retirement. Washington, DC: AARP. Available at http://assets.aarp.org/rgcenter/econ/ multiwork_2003.pdf. Center on an Aging Society. 2005. Caregiving and paid work. Caregivers of Older Persons Data Profile No. 4. Http://ihcrp.georgetown.edu/agingsociety/pubhtml/ caregiver4/caregiver4.html. Centers for Disease Control and Prevention and the Merck Company Foundation. 2007. The state of aging and health in America, 2007. Whitehouse Station, NJ: Merck Company Foundation. Available at http://www.cdc.gov/aging/pdf/saha_2007.pdf. Centers for Medicare and Medicaid Services. 2003. Health status in 2003. Sec. 2 of The Medicare population in 2003. Http://www.cms.hhs.gov/MCBS/Downloads/ CNP_2003_dhsec2.pdf. Connell, C. M., R. R. Janevic, and M. P. Gallant. 2001. The costs of caring: Impact of dementia on family caregivers. Journal of Geriatric Psychiatry and Neurology 14:179–87. Dannefer, D. 2003. Cumulative advantage/disadvantage and the life course: Cross fertilizing age and social science theory. Journal of Gerontology: Social Sciences 58B:S327–S337. Eggebeen, D. J. 2002. The changing course of fatherhood: Men’s experiences with children in demographic perspective. Journal of Family Issues 23:486–506. Evercare and the National Alliance for Caregiving. 2007. Evercare study of family caregivers: What they spend, what they sacrifice. Minnetonka, MN: Evercare; Bethesda, MD: National Alliance for Caregiving. Available at http://www.caregiving. org/data/Evercare_NAC_CaregiverCostStudyFINAL20111907.pdf. FIFARS (Federal Interagency Forum on Aging-Related Statistics). 2006. Older Americans update, 2006: Key indicators of well-being. Hyattsville, MD: FIFARS. http:// agingstats.gov/Agingstatsdotnet/Main_Site/Data/2006_Documents/OA_2006.pdf. Fuller-Thomson, E., M. Minkler, and D. Driver. 1997. A profile of grandparents raising grandchildren in the United States. Gerontologist 37:406–11. Gibson, M. J., and A. Houser. 2007. Valuing the invaluable: A new look at the economic value of family caregiving. Issue Brief No. 82. Available at http://assets. aarp.org/rgcenter/il/ib82_caregiving.pdf. Goldscheider, F. K., and C. Goldscheider. 1994. Leaving and returning home in 20thcentury America. Population Bulletin 48:2–33. Goldscheider, F. K., A. Thornton, and L.-S. Yang. 2001. Helping out the kids: Expectations about parental support in young adulthood. Journal of Marriage and Family 63:727–40.

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Gonyea, J. G. 2005. The economic well-being of older Americans and the persistent divide. Public Policy & Aging Report 15 (2): 1, 3–11. Greiber, L. 2001. Hard times drive adult kids home: Parents grapple with rules for boomerangers. AARP Bulletin Today, December, 1–3. Hacker, J. S. 2006. The great risk shift: The assault on American jobs, families, health care and retirement—and how you can fight back. Oxford: Oxford University Press. Hagestad, G. O. 2000. Intergenerational relations. Paper prepared for the United Nations Economic Commission for European Conference on Generations and Gender, Geneva, July 3. Hareven, T. K. 1978. Transitions: The family and the life course in historical perspective. New York: Academic Press. He, W., M. Sengupta, V. A. Velkoff, and K. A. DeBarros. 2005. 65+ in the United States, 2005. U.S. Census Bureau Current Population Reports No. P23-209. Washington, DC: GPO. Available at http://www.census.gov/prod/2006pubs/p23-209.pdf. Hooyman, N. R., and J. G. Gonyea. 1995. Feminist perspectives on family care: Policies for gender justice. Thousand Oaks, CA: Sage. Hughes, M. E., and A. M. O’Rand. 2004. The lives and times of the baby boom. New York: Russell Sage Foundation. International Longevity Center–USA. 2006. Caregiving in America. New York: International Longevity Center. Jerome, D. 1994. Time, change and continuity in family life. Aging and Society 14:1–27. LaPlante, M., C. Harrington, and T. Kang. 2002. Estimating paid and unpaid hours of personal assistance services in activities of daily living provided to adults living at home. Health Services Research 37:397–414. Levine, C. 1998. Rough crossings: Family caregivers’ odysseys through the health care system. New York: United Hospital Fund. MetLife Mature Market Institute and the National Alliance for Caregiving. 2006. The MetLife Caregiving Cost Study: Productivity losses to U.S. business. Westport, CT: MetLife Mature Market Institute: Bethesda, MD: National Alliance for Caregiving. Available at http://www.caregiving.org/data/Caregiver%20Cost%20Study.pdf. Moen, P. 2001. The gendered life course. In Handbook of aging and the social sciences (5th ed.), ed. R. H. Binstock and L. K. George, 179–96. San Diego: Academic Press. Mosisa, A., and S. Hipple. 2006. Trends in labor force participation in the United States. Monthly Labor Review 129 (10): 35–57. Available at http://www.bls.gov/ opub/mlr/2006/10/art3full.pdf. National Council on Aging. 2000. Myths and realities: 2000 survey results. Washington, DC: National Council on Aging. National Alliance for Caregiving and AARP 2004. 2004. Caregiving in the U.S. Washington, DC: AARP. Available at http://assets.aarp.org/rgcenter/il/us_caregiving.pdf. O’Rand. A. M. 2002. Cumulative advantage theory in life course research. Annual Review of Gerontology and Geriatrics 22:14–20. Paul, P. 2003. The permaparent trap. Psychology Today, September/October. Available at http://psychologytoday.com/articles/pto-2993.html. Pinquart, M., and S. Sorensen. 2003a. Differences between caregivers and noncaregivers in psychological health and physical health: A meta-analysis. Psychology and Aging 18:250–67.

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———. 2003b. Predictors of caregiver burden and depressive mood: A meta-analysis. Journal of Gerontology, Psychological Sciences 58:112–28. Riley, M. W., M. A. Foner, and J. W. Riley Jr. 1999. The aging and society paradigm. In Handbook of theories of aging, ed. J. E. Birren and K. W. Shaie. New York: Van Nostrand Reinhold. Riley, M. W., and J. W. Riley. 1996. Generational relations: A future perspective. In Aging and generational relations: Life course and cross-cultural perspectives, ed. T. K. Hareven. New York: Aldine de Gruyter. Santos-Eggimann, B. 2002. Evolution of the needs of older persons. Aging Clinical and Experimental Research 14:287–92. Shanas, E. 1979. Social myth as hypothesis: The case of the family relations of old people. Gerontologist 19: 3–9. Simmons, T., and J. Lawler Dye. 2003. Grandparents living with grandchildren, 2000. Washington, DC: U.S. Census Bureau. Available at http://www.census.gov/ prod/2003pubs/c2kbr-31.pdf. Skolnick, A. 1991. Embattled paradise. New York: Basic Books. Spillman, B. C., and L. E. Pezzin. 2000. Potential and active family caregivers: Changing networks and the ‘‘sandwich generation.’’ Milbank Quarterly 78:347–74. Temple University. 2007. Divorce foretells child’s future care for elderly parent. Science Daily, September 24. Available at http://www.sciencedaily.com/releases/ 2007/09/070915081436.htm. Wolff, J. L., and J. D. Kasper. 2006. Caregivers of frail elders: Updating a national profile. Gerontologist 3:344–56. Uhlenberg, P. 1996. Mutual attraction: Demography and life-course analysis. Gerontologist 36:226–29. Uhlenberg, P., and B. G. Hammill. 1998. Frequencies of grandparent contact with grandchild sets: Six factors that make a difference. Gerontologist 38:276–85. U.S. Census Bureau. 2000. Population by age, sex, and race and Hispanic origin: March 2000, table 1 of Current population survey, March 2000. Http://www.census.gov/population/socdemo/race/black/ppl-142/tab01.txt. ———. 2003a. Estimated median age at first marriage by sex: 1890 to present. Http://www.census.gov/population/socdemo/hh-fam/tabMS-2.xls. ———. 2003b. Marital status of the population age 15 and older by sex and race: 1950 to present. Http://www.census.gov/populatoin/socdemo/hh-fam/tabMS-1.pdf. ———. 2003c. Married-couple and unmarried partner households, 2000. Washington, DC: U.S. Census Bureau. Available at http://www.census.gov/prod/2003pubs/ censr-5.pdf. ———. 2004. Global population composition. In Global population profile, 2002, 31–53. Washington, DC: U.S. Census Bureau. Available at http://www.census. gov/ipc/prod/wp02/wp-02004.pdf. Wachter, K. W. 1998. Kinship resources for the elderly: An update. University of California, Berkeley, Department of Demography. Available at http://www.demog. berkeley.edu/wachter/WorkingPapers/terrace.pdf. Ward, R. A., and G. Spitze. 1998. Sandwiched marriages: The implications of child and parent relations for marital quality in midlife. Social Forces 77:647–66. Wu, Ke Bin. 2006. Sources of income for older persons in 2004. Washington, DC: AARP Public Policy Institute. Available at http://assets.aarp.org/rgcenter/econ/ dd148_income.pdf.

14

Who Will Care? Building the Geriatric Long-Term Care Labor Force MARY F. HARAHAN AND ROBYN I. STONE

A

s millions of baby boomers march inexorably toward older ages, there are increasing concerns about the capacity of the caregiving workforce to meet the demand for long-term care. Most long-term care employers, workers, and public policy officials, and many consumers, agree the workforce is in crisis. The crisis is reflected in labor shortages, rapid staff turnover, the inability of many consumers to find willing providers outside their families, and grave concerns about the quality of care, particularly in nursing homes. This chapter describes the makeup of the professional and direct care staff who oversee, manage, supervise, and deliver agency- and facility-based long-term care services to older Americans, the factors contributing to workforce instability, and the longer-term trends that may worsen or help to ameliorate a future crisis. The chapter concludes by identifying employer practices, education and training strategies, and public policies that may help to insure the availability of a stable and competent geriatric long-term care workforce in the years ahead. For our purposes, we define long-term care as a variety of services and supports provided by paid caregivers that concentrates on helping individuals to function as well as possible and to maintain their lifestyles in the face of disability. These primarily low-tech services are designed to minimize, rehabilitate, or compensate for loss of independent physical or mental functioning (Stone 2006). Long-term care is conceptually different from medical care that is directed at the diagnosis, treatment, and follow-up of acute and

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chronic illness, although many long-term care users are also heavy users of medical care. Long-term care services are delivered in residential facilities such as nursing homes, assisted living facilities, board and care homes, and other residential care settings; by home- and community-based service organizations, including home health and personal care agencies, home care agencies, and adult day care centers; and by self-employed individuals hired directly by consumers and their families. The challenges and opportunities facing informal caregivers—the family members and friends who provide the majority of long-term care—were treated in chapter 13. Our focus is on agency- and facility-based and self-employed providers who are paid for their services (although as more states develop programs that pay informal caregivers, distinctions between formal and informal care are increasingly difficult to discern). THE DEMAND FOR LONG-TERM CARE SERVICES In 2003, almost 36 million people in the United States were 65 years of age or older, and 4.7 million of these were age 85 and older. U.S. Bureau of the Census demographers project that by 2030 the older adult population will increase to 72 million people—twice as large as today’s population of older adults, and the number of individuals 85 years of age and older will increase to 9.6 million. This ‘‘senior citizen’’ population explosion is the result of the aging of the baby boomers—the first of whom will turn 65 in 2011 and 85 in 2031—increased longevity, and relatively low fertility rates (He et al. 2005). While the impact of this extraordinary demographic shift on the demand for long-term care will be substantial, it is important to keep in mind that America’s seniors are living longer, healthier, and more independent lives than ever before in history. Life expectancy at birth has risen from 47.3 years in 1900 to 76.9 in 2000. Only a small minority of younger seniors between the ages of 65 and 74 have significant disabilities that require help with personal care tasks such as eating, bathing, or dressing (National Institute on Aging 2007). A 2007 Institute of Medicine study on disability also brings good news, confirming the findings of other researchers (Manton, Gu, and Lamb 2006; Freedman et al. 2006) that the total number of functional and cognitively disabled older adults actually declined in the 1980s and 1990s—despite the overall growth of the elderly population. This trend is continuing into the twenty-first century. These positive indicators do not negate the indisputable evidence that the incidence and prevalence of disability increases with age. Older adults, particularly individuals age 85 and above (the ‘‘oldest old’’), are seven times more likely to need help with basic personal care tasks than are the younger elderly, that is, individuals aged 65–75 (National Center for Health Statistics 2007). If disability rates were to remain the same as they are today, by 2030

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there would be 22 million disabled elderly—9.6 million of whom will be 85 and older. After 2030, when the baby boomers begin to turn 85, the number of this oldest-old group will really begin to accelerate. While the size of the elderly long-term care population will depend on future disability rates (and other factors discussed later in the chapter), it is clear is that as baby boomers enter later life, they will have a large impact on long-term care demand. THE CAPACITY OF THE GERIATRIC WORKFORCE TO RESPOND What is the capacity of the long-term care workforce to meet the long-term care demand now and in the future? A look at the experience of the past decade is not reassuring. Numerous federal agencies (e.g., the Institute of Medicine, the U.S. Department of Health and Human Services, and the U.S. Department of Labor), more than thirty-five state commissions and task forces, and many privately sponsored employer and consumer groups have taken a hard look at the above question. All are largely in agreement with the following issues: 1. Long-term care providers and consumers face a double-edged sword. It is difficult to recruit staff—from physicians and nurses to nurse aides and personal care workers. Once hired, staff turnover is rapid, leaving large numbers of positions vacant, putting heavy burdens on the remaining workforce, and creating further barriers to attracting and retaining a quality workforce. 2. The preparation of potential candidates for long-term care positions is out of sync with the realities of the long-term care system. Medical and nursing students are usually not exposed to long-term care, and only a small fraction of these students receive training in geriatrics (the diagnosis, treatment, and prevention of disease and disability in older adults). Nurses and administrators are poorly prepared for the management and supervisory roles with which they are charged in long-term care settings, a weakness that has been directly linked with the high turnover among direct-care workers (Bowers, Esmond and Jacobson 2003). Direct-care workers are not prepared for the realities of their jobs, and many leave within the first few months. 3. Workforce instability and inadequate preparation contributes to: (a) significant access problems for some consumers; (b) a seriously compromised quality of care for many long-term care recipients; (c) extreme workload burdens and stress on the workforce; and (d) unnecessary costs for employers resulting from the need to continuously recruit and train new staff.

The Formal Providers of Long-Term Care There are three broad categories of personnel who provide direct care: 1. Licensed personnel, the vast majority of whom are employed by nursing homes, assisted living facilities, and home health and personal care agencies. They include nursing home and home health agency administrators,

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physicians, nurse practitioners (NPs), registered nurses (RNs), licensed practical nurses (LPNs), and licensed vocational nurses (LVNs), as well as therapists and social workers. 2. Facility- and agency-based direct-care workers, including nurse aides, orderlies, and attendants, who are largely employed in nursing homes; and home health, personal care, and home care aides, who deliver care in the recipient’s home as well as in adult day care centers, senior centers, and other aging organizations. 3. Self-employed providers who are hired directly by consumers and their families.

The Roles and Responsibilities of Licensed Personnel Physicians are formally involved in long-term care as nursing home and home health agency medical directors, and as the individuals who are required to sign off on nursing home and home health care plans. Nursing homes reimbursed by Medicare or Medicaid are required to have a physician medical director who is responsible for overseeing the medical care of residents and for participating in the design of the residents’ care plan. Assisted living facilities and home health agencies are not required to have a medical director, although many do. Research on the responsibilities of physicians in long-term care settings is largely lacking. A 1997 survey by the American Medical Association found that the vast majority of physicians (77 percent) did not treat nursing home patients (Levy et al. 2005). Findings from a 2003 study of nursing home medical directors found that 86 percent reported spending eight hours or less per week in a facility, and 62 percent reported visiting the facility one time per week or less (U.S. Department of Health and Human Services 2003). Although no comparable data exist for the home health arena, coordination and communication between physicians and home health agencies has long been regarded as inadequate. The failure to attract more physicians to long-term care settings is attributable to a number of factors. First, few physicians within or outside longterm care have training that prepares them to address the needs of frail, chronically ill, and disabled older adults. A 2005 survey of graduating medical students found that 25 percent did not feel well prepared to care for older adults in acute care settings, and 42 percent did not feel well prepared to care for older people in nursing homes (Rueben 2007). The number of doctors certified in geriatric medicine is actually declining, even though individuals over the age of 65 make up 50 percent of all visits to physicians and 36 percent of hospitalizations. A government study also found that obstacles included lack of payment incentives; too much time needing to be spent on nonreimbursable activities such as phone calls from the nursing home and communicating with staff, families, and other providers; and concerns about obtaining liability coverage (Levy et al. 2005).

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Health Administrators Nursing home, assisted living, and home health administrators are responsible for staff supervision and management and for compliance with federal and state regulations. The federal government requires states to license nursing home administrators, although there are no national standards. The credentialing of administrators in assisted living facilities, home health agencies, and other home- and community-based services agencies is left to the discretion of states. There are no national data on the number of active, licensed administrators in long-term care settings or where they work. The National Association of Boards of Examiners of Long-Term Care Administrators (NABE) estimates there are between 22,000 and 25,000 licensed nursing home administrators, of which 16,000–17,000 are currently employed in nursing homes. Licensing requirements across states are highly varied—some states require only holding a high school diploma and passing an exam. The number of individuals who take the nursing home administrator exam has declined by 40 percent since 1998, and pass rates have also fallen (personal communication between the authors and Randy Linder, executive director of NABE, 2006). A study of more than four hundred nursing homes found an annual turnover rate among administrators of 43 percent. More turnover was associated with higher-than-average proportions of residents who were catheterized, had pressure ulcers, and were given psychotropic drugs and a higher-thanaverage number of quality care deficiencies (Castle 2001). Other studies (Singh and Schwab 2000; Castle 2006) also show low retention rates and a tendency of some administrators to frequently rotate positions. Low retention has been linked to job dissatisfaction, particularly with pay and coworkers, as well as work overload—perhaps an indicator of inadequate nursing home staffing (Castle 2001). Barriers to recruitment and retention include a lack of reciprocity in states with more rigorous requirements to honor licenses issued in other states; inadequate job preparation; the requirement in most states that candidates for nursing home administrator jobs serve an unpaid ‘‘preceptorship’’; the aforementioned dissatisfaction with pay, coworkers, and work overload; and the burden of being responsible for federal regulatory requirements (Linder, personal communication). Nurse Practitioners NPs are RNs with advanced training who operate in an expanded nursing role. They are sometimes employed in nursing homes to conduct physical exams, make urgent care visits, prescribe medications, and provide preventative care. An estimated 78,500 NPs are licensed in the United States, of whom 2,000 are affiliated with nursing homes (Health Resources and Services Administration 2004). An unknown number of NPs are also employed

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by home health agencies. About 3,400 NPs are certified in geriatrics, although the proportion of NPs specializing in this area appears to be declining (Center for Health Workforce Studies 2005). Freestanding nursing homes in states with high Medicaid reimbursement rates and those in urban areas are most likely to employ NPs (Intrator et al. 2005). A small body of evidence supports the value of NPs in long-term care. A study comparing nursing homes with and without NPs found fewer hospital admissions among the former, although residents’ functioning, physical condition, and satisfaction did not seem to be affected (Garrard et al. 1990). A survey of physicians who are members of the American Medical Directors Association found that a majority of respondents perceived NPs to be very effective in maintaining physician, resident, and family satisfaction in nursing homes (Rosenfeld et al. 2004). Registered Nurses RNs are responsible for assuring the quality of clinical care in long-term care settings, assessing health conditions, developing treatment plans, and supervising LPNs, LVNs, and paraprofessional staff. Most nursing home RNs hold administrative and supervisory positions. Federal law requires that the director of nursing in a skilled nursing facility be an RN. RNs employed in home health care assess the patient’s home environment, care for and instruct patients and their families in self-care, and supervise home health aides. There are an estimated 2.9 million RNs in the United States, including 260,000 employed in long-term care settings, usually in nursing homes and home health agencies. While the number of nurses are far fewer in the longterm care sector than in the acute care sector, the RNs—particularly in nursing homes—are more likely than their hospital-based peers to be in high-level management positions. The RN workforce is aging, and many are themselves nearing retirement. Almost all RNs are white women, although a small but growing proportion is foreign born and foreign trained. Half of the 15,000 new nurses in 2004 who were trained and licensed in other countries were employed in long-term care settings (although some served as direct-care workers while completing U.S. nurse licensing requirements) (Redfoot and Hauser 2005). Shortages of RNs across the health and long-term care sectors are ubiquitous. RN shortages were reported by 86 percent of states in 2002 (Moore 2006), and turnover is high. The 2002 American Health Care Association (AHCA) survey of nursing home staffing found an annual turnover rate among directors of nursing and other RNs of about 50 percent; 15 percent of RN positions were vacant. AHCA projects that 39,000 new licensed nurses are needed just to fill current vacancies (Decker et al. 2003). While turnover and vacancy rates among RNs employed by home health agencies

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have not been systematically studied, the U.S. Government Accountability Office (2001) found a 21 percent turnover rate among home health RNs in 2001. A study of home health and hospice agencies in North Carolina found an average annual RN turnover rate of 29 percent in 2007 (Lacey and McNoldy 2007). Licensed Practical/Vocational Nurses LPNs and LVNs provide direct patient care, including taking vital signs and administering medications. A much higher proportion of LPN/LVNs work in long-term care than do RNs. Of the estimated 760,000 active LPN/ LVNs, about 271,000 work in long-term care settings, most often in nursing homes and other extended care facilities. The racial diversity of the LPN workforce is greater than that of RNs; more than one in four are African Americans. Almost all are native born, although this trend varies by geographic location (Seago et al. 2004). LPNs have a shorter, less rigorous path to credentialing than RNs, typically taking twelve to eighteen months to complete licensing requirements, in contrast to RNs who undergo from two to four years of formal preparation. While the LPN scope of practice is more limited than that of RNs, these nurses play a pivotal role in nursing homes. Anecdotal evidence suggests that, with the exception of the director of nursing, it is not unusual for LPNs to be the only nursing presence in a nursing home. According to a 2003 survey conducted by the National Council of State Boards of Nursing, more than 60 percent act as charge nurses or team leaders with responsibility for supervising and directing the care provided by paraprofessional staff. The turnover rate is high, with one study estimating a national rate of 50 percent (Decker et al. 2003). Recruiting and retaining long-term care nurses is daunting. Nursing schools and community colleges appear to make little effort to encourage students to consider long-term care careers. Most students do not receive adequate exposure to long-term care settings as part of their clinical training. Only about one in four baccalaureate nursing programs requires any coursework in geriatrics, and most curricula do not include information on long-term care practice. Nurses, furthermore, lack financial incentives to choose long-term care careers. For example, RNs who practice in nursing homes and home health agencies make about $6,000 less per year than hospital-based RNs (Bureau of Labor Statistics 2006). Career mobility and advancement opportunities are also lacking. Staff turnover and vacancies and inadequately prepared direct-care workers add to the burden and stress of the job, exacerbated by the overwhelming paperwork requirements associated with government regulation. The long-term care workplace, therefore, is viewed by many nurses as unappealing. For those who are employed in this sector, they often do not remain in the position for long.

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Social Workers Social workers who have completed specific coursework and fieldwork in aging (typically at the master’s level) represent one of the fastest-growing segments of the profession (Department of Health and Human Services 2006). These workers address a broad array of problems uniquely facing elders and their families, including functional impairment, psychological problems or cognitive impairments, grief and loss, legal and ethical issues, and end-of-life concerns. Estimates of the number of professional social workers in longterm care settings range from 36,071 to 44,156, depending on the sampling strategy and definition of ‘‘social worker.’’ The number of social workers employed in these settings is projected to increase to 55,000 by 2012. Social workers with a bachelor’s degree in social work (BSW) tend to be employed in long-term care settings at a higher rate than those with a master’s (MSW). A 1995 survey of social work practitioners revealed that 1 percent of respondents with an MSW were employed in nursing homes or hospices and that 3.7 percent identified services to the aged as their primary practice area (Gibelman and Schervish 1997). In contrast, the comparable figures for respondents with a BSW were 11.5 percent and 16.5 percent, respectively. Although there is no clear explanation for this differentiation in the literature, it is most likely related to the complex interplay of financing and reimbursement of social work services in general and/or the lack of a statutory distinction between BSW and MSW in fulfilling Medicare and Medicaid conditions of participation. According to standards promulgated by the National Association of Social Workers (2003), social workers in long-term care settings focus on several key areas, including: • the social and emotional impact of physical or mental illness or disability • the preservation and enhancement of physical and social functioning • the promotion of the conditions essential to ensure maximum benefits from long-term health care services • the prevention of physical and mental illness and increased disability • the promotion and maintenance of physical and mental health and an optimal quality of life

When bachelor’s- and master’s-level social workers are employed in the same long-term care setting, it has been reported that BSWs and MSWs typically have different, yet complementary, responsibilities. Findings from a study of BSW and MSW employment markets indicate that these workers rarely compete with one another for jobs (Barth 2001). For example, a social worker with a BSW in a nursing home might serve as a discharge planner for short-stay residents in a post-acute unit, while one with an MSW might provide clinical supervision of the BSW as well as counseling and other behavioral interventions to long-stay residents and their families.

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Direct-Care Workers: The ‘‘Hands, Voice, and Face’’ of Long-Term Care Direct-care workers are the core of the long-term care system, responsible for helping frail and disabled older adults carry out the most intimate and basic activities of daily life, such as eating, bathing, dressing, and toileting. They are by far the largest group of health care workers and the largest component of the long-term care geriatric workforce. These workers include both facility- and agency-based workers and self-employed individuals. Facility/agency-based workers serve as nurse aides (including orderlies and attendants) and home health and personal care aides. There are an estimated 1.4 million nurse aides, half of whom work in nursing homes, with the other half working in other residential care arrangements. There are 615,000 home health and personal care aides, including 205,000 who work for home health agencies and another one-fifth who are employed by residential longterm care providers (Center for Health Workforce Studies 2005). As is true with licensed nurses, direct-care workers are almost entirely women. The mean age of nurse aides is from the mid- to late 30s; the mean age of home care workers is 46. The percentage of home care workers over age 65 is three times that of aides in nursing homes. About half of nurse aides are employed full-time, while two-thirds of home care workers are employed only part-time. The wages of direct-care workers lag behind those of hospital workers, ranging from $8 to $9 per hour. A government study found that almost 18 percent of nurse aides and 19 percent of home care aides have family incomes below the poverty level, while only 8 percent of nurse aides in hospitals were similarly poor (Decker, Dollard, and Kraditor 2001). Direct-care workers in long-term care settings—particularly those employed in home care—are also much less likely to have health insurance coverage than their peers in hospitals, either because premiums are unaffordable or because policies are not offered. Surprisingly perhaps, more than 30 percent of direct-care workers have at least some college education, while 20 percent do not have a high school diploma (Center for Health Workforce Studies 2005). The direct-care workforce is far more diverse than that of licensed nurses. One in five workers is foreign born and many were educated in another country (Leutz 2007). One-third are African Americans, and 15 percent are either Hispanics or other workers of color. Nursing home aides are more likely to be African Americans, while home care workers are more likely to be of Hispanic origin (Montgomery et al. 2005). As the workforce becomes more diverse, communication issues and the manner in which various cultures differ with respect to caregiving becomes more important. Results of the 2000 U.S. Census show that almost 12 percent of nurse aides in longterm care settings report that they speak English poorly or not at all (Redfoot and Houser 2005). A recent study in four nursing homes found that Filipina LVNs were more uncomfortable than black or white nurses in

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carrying out supervisory responsibilities—or even raising issues to the director of nursing that might improve the workplace. Such assertiveness was not part of their cultural norms. The study also uncovered staff tension resulting from language and communication differences between racial and ethnic groups (Bowers, Stone, and Sanders 2007). To become certified as a nurse aide, federal law requires less than two weeks training or passing a certification exam, although most states add on to these requirements. Home health aides must pass a federally mandated competency exam for their employers to receive reimbursement from Medicare. Federal continuing-education requirements for home health aides and nurse aides are minimal, and the content is left to states and providers. The regulation of other direct-care workers, including those who work in assisted living, and of personal care and home care agencies is determined by the states. Typically staff in these settings receive little or no training. Self-employed home care workers are hired directly by consumers to provide personal assistance services and other supportive tasks. Montgomery and colleagues (2005) estimate the size of the self-employed home care workforce at more than 134,000. The increase in self-employed home care workers has been stimulated by federal and state support of consumerdirected models of service delivery that enable care recipients to hire, direct, and fire their own home care workers. In some states, these consumerdirected models also enable care recipients to employ members of their family to provide needed care. Studies find that when the opportunity is available, from 40 percent to almost 80 percent of participants in consumerdirected programs hire relatives to care for them. Job satisfaction and stress are equal to or more positive for consumer-directed workers than for those who are agency based (Benjamin and Matthias 2004). The evaluation of the federally sponsored Cash and Counseling demonstration, which enabled disabled beneficiaries to hire and fire their personal assistance workers and pay them directly, found that the wages of consumerdirected workers were about 15 percent higher than agency-directed workers in two of the three demonstration states, but 5 percent less in the other state. About 40 percent of consumer-directed workers said they were satisfied with their wages and benefits, in contrast to only about 20 percent of agency-directed workers. Injury rates across both groups of workers were comparable (Dale et al. 2005). Perhaps the worst aspect of the geriatric long-term care workforce crisis is the failure to attract and retain adequate numbers of high-quality directcare workers to provide hands-on care. While the magnitude and distribution of shortages in the direct-care workforce cannot be accurately accessed, there is considerable evidence that shortages are overwhelming the longterm care system. A survey of states found two-thirds reported shortages of certified nursing assistants and 60 percent reported shortages of home health aides (Moore 2006).

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AHCA’s 2002 nursing home staffing survey showed an annual turnover rate among certified nurse aides of 71 percent and a vacancy rate of 8.6 percent, a shortfall of about 52,000 workers (Decker et al. 2003). A Wisconsin study found turnover rates among direct-care workers of 77–164 percent in assisted living facilities, 99–127 percent in nursing homes, and 25–50 percent in home health agencies. Another study in North Carolina found turnover rates for aides of 95 percent in nursing homes and 37 percent in home care agencies (Wright 2005). California attempted to quantify the shortfall of direct-care workers by comparing the number of nursing assistant certificates issued in 1998–2001 with the number of certificates not renewed for the same time period. They found a net loss of 10,777 aides. A further analysis revealed that more than half of the aide certificates earned in 1997 had not been renewed in 2001 (U.S. Bureau of Health Professions 2004). The causes of these shortages are multifaceted. Competition for entrylevel workers from other service industries is stiff, and wage levels in longterm care have not kept pace with other entry-level jobs with far less responsibility. Stakeholders in some states have observed that acute care hospitals are able to draw workers away from other long-term care employers by offering higher salaries and/or better benefits (U.S. Bureau of Health Professions 2004). Injury rates are among the highest of any occupation—higher than coal miners or construction workers. The lack of health insurance for many workers adds to the risk. Direct-care work is also physically demanding and emotionally stressful. A recent national report on the mental health status associated with various occupations noted that 11 percent of personal care workers reported being depressed for two or more weeks, the highest rate of depression experience by any of the twenty-one occupational categories that were tracked (Substance Abuse and Mental Health Services Administration 2007). High turnover and vacancy rates leave fewer workers to share the burden. Neither the training required for certification nor the way workers are supported after they are hired is adequate to help these workers address the on the job challenges they must face. A substantial body of research shows that direct-care workers who are valued by their supervisors and whose opinions are solicited and listened to have higher levels of job satisfaction and are more likely to stay in their jobs (Bowers, Esmond, and Jacobson 2003; Harris-Kojetin et al. 2004). According to recent data from the 2006 National Nursing Assistant Survey, overall job satisfaction of nursing home aides is high, with about 30 percent stating they are extremely satisfied with their jobs and another 51 percent somewhat satisfied. Of those who report being extremely or somewhat satisfied, 99 percent say they continue to work as a nurse aide because they like caring for others. Yet, in spite of the fact that most aides like caregiving, less than half say they would recommend that a family member or friend work as a nurse aide in their facility. When respondents were asked to identify reasons for job

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dissatisfaction, they identified coworkers, workload, and supervisors as their principal concerns (U.S. Department of Health and Human Services 2007). Why Workforce Shortages Matter A substantial body of research has addressed the relationship between turnover, staffing levels, and quality of resident care in nursing homes, although much less attention has been paid to the relationship between quality outcomes and specific staff skills and behaviors. Studies of these relationships in the home health and assisted living industries are lacking. A meta-analysis of the literature identified eighty-seven articles and reports published between 1975 and 2003 that showed a direct relationship between higher nursing home staffing levels, particularly of licensed nursing staff, and improved quality of care (Bostick et al. 2006). A 2005 national study of nursing home staffing concluded that 97 percent had staffing levels below those recommended by the Institute of Medicine in its landmark report Improving the Quality of Long-Term Care (Harrington 2005). Bostick and colleagues (2006) also found a strong association between poorer resident outcomes and high turnover. Higher turnover rates in nursing homes have been associated with greater use of physical restraints, catheters, and psychoactive drugs; more contractures and pressure ulcers; and quality-of-care deficiencies. The shortage of direct-care workers in the home care industry has also had a direct impact on consumer access. Evaluation results from the Cash and Counseling program found that participants who relied on the traditional agency-based service system were not able to obtain the services to which they were entitled, and in some cases could not obtain any services at all, because of worker shortages (Dale and Brown 2007). Spillman and Black (2005) analyzed five years of data from the National Long-Term Care Survey and found that the proportion of care recipients who relied on formal care dropped from 43 percent in 1994 to 34 percent in 1999, while the proportion who relied entirely on informal care increased from 57 to almost 66 percent. While some of the reduction was no doubt the result of federal budget cuts in the Medicare program, the study author attributes some of the reduction to a shortfall of paid workers. Why the Laws of Supply and Demand Don’t Work The Bureau of Labor Statistics projects job growth in the health care sector to exceed all other sectors of the economy. With so many job openings anticipated and rising demand for services, shortages in the long-term care workforce are at odds with classic economic theories of supply and demand. Particularly in a strong economy with low unemployment, long-term care employers must be competitive to recruit and retain their workforce. There

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are many reasons why employers are not able to effectively compete in the labor market. • The labor pool that has historically provided caregiving services to the longterm care population is shrinking at the same time that demand is increasing. Baby boomers had a smaller average number of children than their parents. The native-born population aged 25–54, from which both paid and informal long-term care providers have largely come, will not increase at all between now and 2015. As a consequence, long-term care employers cannot rely on traditional sources of labor. • A negative stereotype of long-term care discourages new job entrants. A Kaiser Commission survey of public attitudes toward long-term care found that nursing homes rank below drug companies and just above health insurance companies in the share of adults who think they do a good job. Six in ten respondents said they thought nursing homes make people worse off (Kaiser Family Foundation 2005). Ageism in the broader culture, the sensationalizing of nursing home scandals in the media, and negative attitudes of educators and leaders in professional schools and associations reinforce a negative image of long-term care as a career choice. • Inadequate compensation and poor benefits, exacerbated by government’s role in long-term care financing, reduces the industry’s ability to compete for labor. Wages, particularly for the direct-care workforce, are low. Large numbers of part-time workers further depress their earnings. Research has demonstrated that when the wages are increased, recruitment and retention of direct-care workers improves. For example, when San Francisco raised direct-care workers’ wages from the minimum to $10.00 per hour, the supply of home care workers doubled (Howes 2002). Unfortunately, long-term care employers have a diminished capacity to enhance wages and benefits. More than 70 percent of financing of home health and long-term care comes from government funding—chiefly from the Medicare and Medicaid programs. Policy makers aggressively attempt to control the cost of these programs regardless of labor market conditions. • The organization and management of the workplace environment is often outdated and even dysfunctional. Top-down hierarchal command structures are the norm. Direct-care workers and lower-level nursing staff are typically not involved in decision making, and lack of communication among staff is a frequent complaint. Consequently, nurses and direct-care staff perceive a lack of respect and a lack of acknowledgment of the important roles they play. Work flow, job design, and scheduling are often inflexible, further contributing to a dysfunctional work environment where burdensome paperwork has replaced hands-on care. Ethnic and racial tensions exacerbate an already difficulty work climate. Finally, career advancement opportunities are few, and performance incentives are negligible. • The system for educating and training the geriatric long-term care workforce is failing. The quality of long-term care depends on the performance of the personnel who provide it. The investment at the federal, state, and provider levels in workforce development is completely inadequate to address

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staffing needs. The strategies employed by regulators and educators to prepare and license or certify the workforce, and to assure that personnel are able to keep pace with changes in the clinical knowledge base and new technologies, are not effective. There is a huge shortfall of personnel who are competent and committed to educating and preparing both professional staff and direct-care workers for long-term care careers. • U.S. immigration law impedes attracting a promising labor source. Although immigrants are viewed by many employers as a valuable resource to increase the supply of nurses and direct-care workers, immigrants may only come into the United States with a temporary or permanent visa. Visas for all temporary and permanent less-skilled workers are capped at 5,000 per year, making it almost impossible for long-term care employers, who must compete against other industries, to draw on them to recruit new personnel. Limits for higher-skilled personnel such as nurses and physicians are less restrictive (Leutz 2007).

FUTURE TRENDS Shift from Institutional to Home- and Community-Based Care Between 1985 and 2004, the absolute number of older adults in nursing homes declined, with the steepest declines occurring among the oldest old (Alecxih 2006). The decline occurred simultaneously with tremendous growth in public and private spending for assisted living and in-home services and the Supreme Court’s Olmstead decision—requiring people to be served in the least restrictive setting commensurate with their needs. The long-term care system of the future, therefore, will not be skewed toward nursing homes. Whether or not nursing homes will be around in the futureand the authors expect they will be—home- and community- based services will dominate the landscape. This shift will influence service delivery models of the future and the type of workforce that will be needed. Future Direction of Disability Rates There is little consensus regarding the direction of future disability rates and whether the declines of the past several decades will be sustained. Medical breakthroughs such as the prevention or cure of Alzheimer’s disease could have a profound effect on reducing the demand for long-term care, particularly in institutional settings. However, less-complex interventions such as reducing falls among older adults could also have a big payoff. Increased Diversity of the Baby-Boom Generations Baby boomers will have a different look than past elderly cohorts as the proportion of non-Hispanic whites is projected to drop from 83 percent in 2000 to 64 percent in 2050. Baby boomers will also be better educated and have, on average, higher incomes than past elderly cohorts. Since individuals

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with higher incomes and more education are less likely to be disabled, this trend could affect demand for long-term care. At the same time, wealthier elderly in the future may have more ability to pay for care in the private market, increasing the demand for a long-term care workforce, particularly in home care. This trend, however, could be mitigated by more people living longer and outliving their savings just at the time that the need for longterm care increases substantially (Soldo et al. 2007).

Increasing Use of Technology Assistive technologies, such as canes and walkers, and housing adaptations such as ramps, wheelchair-accessible showers and toilets, and grab bars help disabled older adults reduce or eliminate the need for human assistance in carrying out routine activities. One study has linked declining disability rates (as measured by the need for human assistance) among the elderly to increased use of these technologies (Freedman et al. 2006). More widespread use could help to compensate for a decreasing supply of caregivers in the future. Development and large-scale adoption of more sophisticated technologies (e.g., telehealth devices, smart homes) could also significantly affect the efficiency of the labor force and ultimate demand. RECOMMENDATIONS FOR ACTION Over the past four years, the Institute for the Future of Aging Services (IFAS), the home base for this chapter’s authors, has engaged in a broad range of geriatric long-term care workforce initiatives, including managing a multimillion-dollar national program—‘‘Better Jobs, Better Care’’—to encourage policy and practice development in the area of the direct-care workforce. Other activities have included the creation and pilot-testing of a new management/leadership training program for LVNs who serve as charge nurses in California nursing homes. In addition, the American Association of Homes and Services for the Aging (AAHSA), IFAS’s parent association, recently established a long-term care workforce cabinet to help guide the direction of future efforts in this area. From our knowledge of the literature, along with our own experience and that of many of our public and private sector partners, we take away two overarching lessons: • Significant progress to reform the geriatric long-term care workforce requires all stakeholders to recognize the long-term care workforce as a critical and unique component of the U.S. labor force—separate and distinct from the health care labor market. • Stakeholders willing to work collaboratively as a coalition rather than as competitors can put long-term care workforce issues on the table and change policy and practice.

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With these lessons as the framework, we advocate the following actions: 1. Employers must change the way they recruit, compensate, manage, and reward long-term care personnel. Employers should aggressively market long-term care careers to high school and college students, including those attending professional colleges and universities (i.e., medical, nursing, and social work schools). They should also explore the recruitment of recent immigrants with nursing and medical degrees from other countries, younger (65- to 74year-old) seniors as well as retired health professionals, people with physical disabilities, and ‘‘welfare-to-work’’ and long-term unemployed workers. They must also figure out creative ways to raise wages and improve benefits to stay competitive in local labor markets. In addition, they must radically alter working conditions so that professional and direct-care staff are involved in (and accountable for) decisions about the organization and operation of the workplace; work in teams; are granted the authority to make decisions commensurate with their knowledge and skills; are able to work across racial, ethnic, and language boundaries; and have access to meaningful staff development and career advancement opportunities. 2. The formal system of education, licensing, certification, and continuing education of long-term care professional and direct-care staff must undergo top-to-bottom reform. Coalitions of policy makers, educators, employers, and longterm care personnel should begin this reform by first implementing statesponsored working groups on the education and training of the geriatric long-term care workforce. The workgroups would: • examine how prospective candidates learn about long-term care careers • review the adequacy of clinical, management, and supervisory training • assess the effectiveness of professional schools, community colleges, and other education vendors who provide training and the teaching methods they employ • evaluate the impact of continuing education programs on recruitment, retention, and workforce quality

Partnerships among long-term care providers; nursing, medical, and social work schools; and community colleges should also be created to improve student access to clinical training sites in long-term care settings and opportunities for clinical internships. Furthermore, efforts should be designed to improve access to and affordability of education and training for nurses, social workers, and direct-care workers by placing more emphasis on long-distance learning and Web-based learning opportunities, flexible scheduling of courses, accessible training locations, and scholarship and loan forgiveness programs for individuals who commit to long-term care careers. In addition, financial and workplace incentives should be developed at all governmental levels to • motivate administrators, nurses, and social workers to obtain needed training in gerontology and geriatrics; leadership, management, and supervision; and cultural competency

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• insure that medical, nursing, and social work students are required to take courses in geriatrics and gerontology as part of their training, including an emphasis on caring for older adults with long-term care needs • provide incentives to attract to professional schools faculty who have been trained in and are committed to the instruction and diffusion of geriatrics and gerontology 3. Federal, state, and local workforce policies should be revised to reinforce the success of long-term care employers and educators who are committed to workforce reform and improvement. Numerous policy levers are available. For example, to make long-term care sector wages and benefits more competitive in the broader labor market, the following strategies could be pursued: • establishing wage parity between hospitals and long-term care settings • passing living-wage ordinances for direct-care workers • strengthening Medicaid wage pass-through strategies so they reach directcare workers • tying Medicaid rate increases to the success of long-term care employers in providing higher wages and improving retention and quality • sponsoring affordable health insurance options, particularly for part-time workers • adequately compensating medical directors and directors of nursing who have federally mandated responsibilities in nursing homes and home health • tracking the competitiveness of long-term care providers in local health and long-term care labor markets and developing rate-setting standards in line with local labor market conditions

Nurse aide and home health aide competencies should be strengthened and better articulated so that individuals are better prepared for the job. Federal and state certification requirements should be evaluated to determine their impact on recruitment, retention, and quality of care, and required competencies should be realigned so that they are evidence based and reflect the realities of the job. State nursing boards should also modify the scopes of practice of RNs and LPNs to make them congruent with the actual responsibilities of nurses in long-term care settings. Another policy avenue is to explore how to increase and earmark federal and state workforce development funds (e.g., the Workforce Investment Act, TANF, Title VIII of the Public Health Service Act) specifically for the recruitment and training of the geriatric long-term care workforce. The use of public authorities at the state and local levels should also be promoted to improve training and increase compensation of independent providers. Finally, a national database should be developed to track long-term care workforce shortages and how they are distributed. 4. New investments in research, demonstration, and evaluation must be made to understand the effectiveness of various strategies and interventions to grow and

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stabilize the geriatric long-term care workforce and improve its quality. Considerable attention has been paid to documenting the crisis in the direct-care workforce and developing best-practice strategies. It has been difficult, however, to convince public and private funders to make investments in evaluating the impact of these good intentions and in helping to diffuse evidencebased approaches. In addition, most of the activity in the development of the professional geriatric workforce (physicians, nurses, and social workers) has focused on those trained for or employed in the acute care sector. A prudent investment strategy to address long-term care workforce improvement, therefore, should first involve evaluating what we have learned from past investments. This should be followed by extending our workforce research to emphasize the roles, requirements, and performance of professional staff in long-term care settings and to find out what combination of education, training, financial incentives, and workplace redesign will be needed to develop and sustain a quality workforce now and in the future.

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Manton, K. G., X. Gu, and V. L. Lamb. 2006. Change in chronic disability from 1982 to 2004/2005 as measured by long-term changes in function and health in the U.S. elderly population. Proceedings of the National Academy of Sciences 103 (48): 18374–79. Montgomery, R. J., L. Holley, J. Deichert, and K. Kosloski. 2005. A profile of home care personnel from the 2000 Census: How it changes what we know. Gerontologist 45:593–600. Moore, J. 2006. Understanding and responding to health workforce shortages. Paper presented at the Central New York Area Health Education Center board of directors meeting, Cortland, NY, June 21. Available at http://chws.albany.edu/ index.php?id=12,0,0,1,0,0. National Association of Social Workers. 2003. Standards for social work services in long-term care facilities. Washington, DC: National Association of Social Workers. National Center for Health Statistics. 2007. Early release of selected estimates based on data from the January–March 2007 National Health Interview Survey. September 26 release. Available at http://www.cdc.gov/nchs/about/major/nhis/ released200709.htm. National Institute on Aging. 2007. Why population aging matters: A global perspective. Publication No. 07-6134. Bethesda, MD: National Institute on Aging. Redfoot, D. L., and A. N. Houser. 2005. ‘‘We shall travel on’’: Quality of care, economic development, and the international migration of long-term care workers. Washington, DC: AARP Public Policy Institute. Rosenfeld, P., M. Kobayashi, P. Barber, and M. Mezey. 2004. Utilization of nurse practitioners in long-term care: Findings and implications of a national survey. Journal of the American Medial Directors Association 5 (1): 9–15. Rueben, D. 2007. Health care needs of today’s older Americans. Presentation to the Institute of Medicine Committee on the Future of the Health Care Workforce for Older Americans. Seago, J. A., J. Spetz, S. Chapman, W. Dyer, and K. Grumbach. 2004. Supply, demand, and use of licensed practical nurses. Rockville, MD: Health Resources and Services Administration, Bureau of Health Professions. Singh, D. A., and R. C. Schwab. 2000. Predicting turnover and retention in nursing home administrators. Gerontologist 40:310–19. Soldo, B. J., O. S. Mitchell, R. Tfaily, and J. F. McCabe. 2007. Cross-cohort differences in health on the verge of retirement. In Redefining retirement: How will boomers fare? ed. B. Madrian, O. S. Mitchell, and B. J. Soldo. New York: Oxford University Press. Spillman, B., and K. Black. 2005. Staying the course: Trends in family caregiving. Washington, DC: AARP. Stone, R. I. 2006. Emerging issues in long-term care. In Handbook of aging and the social sciences (6th ed.), ed. R. Binstock and L. George, 397–417. San Diego: Academic Press. Substance Abuse and Mental Health Services Administration (SAMHSA). 2007. Depression among adults employed full-time, by occupational category. NSDUH Report. Rockville, MD: SAMHSA. U.S. Bureau of Health Professions, Health Resources and Services Administration. 2004. Nursing aides, home health aides, and related health care occupations: National and local workforce shortages and associated data needs. Washington, DC: Bureau of Health Professions.

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About the Editor and Contributors

THE EDITOR Robert B. Hudson, Ph.D., editor of this two-volume set, is professor and chair of the Department of Social Policy, Boston University School of Social Work. He has written widely on the policies and politics of aging, his work having appeared in Social Service Review, Milbank Quarterly, International Social Security Review, Journal of Health Politics, Policy and Law, and Handbook of Aging and the Social Sciences, among other publications. He currently serves as editor-in-chief of Public Policy & Aging Report, the quarterly publication of the National Academy on an Aging Society. Dr. Hudson is a fellow of the Gerontological Society of America (GSA) and an elected member of the National Academy of Social Insurance, where he chairs the John A. Heinz Dissertation Award Committee. He has received the Donald Kent Award from GSA and the Arthur S. Flemming Award from the National Association of State Units on Aging. His most recent book is The New Politics of Old Age Policy (Johns Hopkins University Press). He received his doctorate in political science from the University of North Carolina at Chapel Hill. CONTRIBUTORS Elyssa Besen received her B.A. in psychology with high honors from Brandeis University in 2007. She is currently a first-year doctoral student in developmental psychology at Boston College. She serves as a research assistant at the Center on Aging & Work/Workplace Flexibility, where she works on the Age & Generations Study.

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Donna M. Butts has served since 1997 as the executive director of Generations United, the only national membership organization focused solely on improving the lives of all generations through intergenerational collaboration, public policies, and programs. She has thirty-five years of nonprofit leadership experience and is a respected author and speaker. In 2004, Ms. Butts was honored with the National Council on Aging’s Jack Ossofsky Award for leadership, creativity, and innovation. She was an at-large delegate to the 2005 White House Conference on Aging and was invited by the United Nations to sit on two expert panels on aging policy and intergenerational solidarity. Currently she chairs the International Consortium for Intergenerational Programmes. Ms. Butts is a graduate of Stanford University’s Executive Program for Non-Profit Leaders and holds a B.A. from Maryhurst College. Neal E. Cutler, Ph.D., is executive director of the Center on Aging at the Motion Picture & Television Fund and dean of the American Institute of Financial Gerontology. For almost two decades, he has worked in the emerging field of financial gerontology, which offers applied gerontology education to qualified financial professionals. His text Advising Mature Clients: The New Science of Wealth Span Planning was published by Wiley in 2002. He is also senior author of American Perceptions of Aging in the 21st Century, published by the National Council on Aging and AARP. Dr. Cutler is an associate editor of the Journal of Financial Service Professionals, where he has been writing its financial gerontology column since 1990. He is a former professional staff member of the U.S. Senate Special Committee on Aging, and in 2006 won the Gloria Cavanaugh Award for Excellence in Training and Education in Aging from the American Society on Aging. Dr. Cutler is a fellow of the GSA and a fellow of the Employee Benefit Research Institute. In 2007, he was elected one of seventy-five national fellows of the TIAA-CREF Institute. David W. Eby, Ph.D., is a research associate professor and head of the Social and Behavioral Analysis Division at the University of Michigan Transportation Research Institute (UMTRI), where he has been working since 1993. He holds a doctoral degree in experimental psychology from the University of California, Santa Barbara. He has also held a postdoctoral fellowship in the Department of Cognitive Sciences at the University of California, Irvine. While at UMTRI, Dr. Eby’s research has focused on reducing the number of deaths and injuries associated with motor vehicle crashes by conducting behavioral research that improves the safety of automobile transportation. An important component of this work has been to improve the safety and mobility of older drivers. Dr. Eby is the founding director of the Michigan Center for Advancing Safe Transportation throughout the Lifespan (M-CASTL),

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a University Transportation Center sponsored by the U.S. Department of Transportation and focused on both young and older adult users of the transportation system. Judith G. Gonyea, Ph.D., is professor and chair of the Research Department at the Boston University School of Social Work. The author of more than ninety publications, much of her research focuses on the cumulative effects of social and economic inequalities on the life experiences of older Americans. She has written and spoken extensively on the changing nature of intergenerational family relations, family caregiving, and the interface of work and family in contemporary American society. Dr. Gonyea currently serves on the editorial boards of Community, Work & Family, Public Policy and Aging Report, Research on Aging, and Journal of Gerontological Social Work. She is a fellow of the GSA and an elected member of the National Academy of Social Insurance. Donald Ray Haas, CLU, CFP, AEP, is president of Haas Institute for Wealth & Aging, located in Birmingham, Michigan. He is a financial gerontologist in practice since 1956 and was cited by Worth magazine as one of the ‘‘300 Best Financial Advisors in America.’’ He currently serves on the Board of Advisors for the American Institute of Financial Gerontology. From 1986 to 2007, Mr. Haas authored a monthly client newsletter, Money Monitor, and he has written two books: How to Plan for Baby Boomers (1998, 2007) and Money Forever (2002). His articles have been published in the Journal of the Society of Financial Service Professionals, and he served as author of the bimonthly newsletter Financial Monitor from 1990 to 1997 for the Society of Financial Service Professionals. In 1999, Mr. Haas hosted a weekly two-hour CBS radio show, Financial Fitness with Don Haas. In 2000, he presented workshops across the United States, and in 2003 he spoke to an audience of more than two thousand at the Asia Pacific Life Insurance Congress in Singapore. Mary F. Harahan has more than twenty-five years’ experience working in long-term care policy and research. For many years, she was a senior executive in the U.S. Department of Health and Human Services (DHHS), managing a policy research and planning office on disability and aging. While at DHHS, she ran the National Long-Term Care Channeling Demonstration and was instrumental in developing the first comprehensive survey of disability, the first national board and care study, and the first national study of assisted living. With her colleague Robyn Stone, she also helped launch the Cash and Counseling demonstration. Since becoming a private consultant, she works with the Institute for the Future of Aging Services, addressing long-term care workforce and affordable housing with services issues.

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Karen Harlow-Rosentraub, Ph.D., is associate professor of nursing at the Frances Payne Bolton School of Nursing at Case Western Reserve University. She serves as external evaluator for the nationally recognized Legacy Corps and Legacy Leadership initiatives at the University of Maryland Center on Aging and has served as principal investigator for the Heartland Center on Aging, Disability and Long-Term Care, a long-term care resource center for the U.S. Administration on Aging. Dr. Harlow-Rosentraub is currently directing MOSAIC (Multinational Organizational Systems for Active and Innovative Citizenship), which focuses on international comparative work in volunteerism and the elderly. Her work has appeared in the Journal of Applied Gerontology, Journal of Voluntary Action, Nonprofit Sector Quarterly, Journal of Urban Affairs, and Gerontologist and in Urban Affairs Review and Generations. Jaia Peterson Lent, M.S.W., is the deputy executive director at Generations United (GU). She leads GU’s policy work educating Congress on intergenerational issues, coordinating a diverse group of organizations serving on GU’s Public Policy Committee, overseeing grassroots outreach efforts, and presenting at national and international conferences. Ms. Lent is a leading expert on intergenerational policies and programs. Under her leadership, the LEGACY housing bill for grandparents raising children was passed and new multigenerational programs were authorized in the Older Americans Act. She received her M.S.W. from Syracuse University. Ms. Lent is a licensed social worker who has worked in Child Protective Services, refugee resettlement, and many other capacities with individuals and families from a variety of cultural backgrounds. Ronald J. Manheimer, Ph.D., is executive director of the North Carolina Center for Creative Retirement (NCCCR), an award-winning lifelong learning, leadership, research, and community service program of the University of North Carolina at Asheville, where he also holds an appointment as research associate professor of philosophy. Through his scholarly and applied endeavors, Manheimer has promoted learning communities for all ages. Robert Martin, senior consultant, is a facilitator and strategic planning consultant in the not-for-profit sector with special emphasis on foundations and grant-making associations. His expertise includes organizational and board development, product and program development, marketing communications, and project management. His clients have included the Council of Foundations, the California Children and Families Commission, Grantmakers for Education, the League of California Community Foundations, the Bill and Melinda Gates Foundation, UCSF Positive Health Practice, the

About the Editor and Contributors

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Transatlantic Community Foundation Network/Bertelsmann Foundation, Community Foundations of Canada, and the Leakey Foundation. Mr. Martin is a consultant for the The Atlantic Philanthropies’ Community Experience Partnership. Lisa J. Molnar, M.H.S.A., is a lead research associate with the Social and Behavioral Analysis Division at UMTRI and the assistant director of the Michigan Center for Advancing Safe Transportation throughout the Lifespan at the University of Michigan. She holds a B.A. in sociology from Michigan State University and an M.H.S.A. in public health policy and administration from the University of Michigan School of Public Health. She has been involved in research on traffic safety and driver behavior at UMTRI since 1986, with much of her recent work focusing on older driver safety and mobility. Ms. Molnar is also a co-convener of the Transportation and Aging interest group of the GSA. Alan Pardini, M.S., is the founder and coprincipal of Community Planning and Research, a consulting and project management firm serving philanthropic organizations and the nonprofit sector. His expertise includes strategic planning, organizational development, and applied research. Mr. Pardini has worked with more than seventy-five community and private foundations in the United States and abroad. He currently serves as the senior advisor with the Community Experience Partnership, a multiyear project funded by the The Atlantic Philanthropies to expand community-level civic engagement opportunities for older adults. Mr. Pardini holds an undergraduate degree in public health from the University of California, Berkeley, and a master’s degree in health policy from Harvard University. Diane S. Piktialis, Ph.D., is a Research Working Group leader and project director at the Conference Board, focused on issues related to the aging workforce and based in Boston. She has published widely in such journals as Business and Health, Quality Review Bulletin, Journal of Aging and Social Policy, Benefits and Compensation Solutions, Compensation and Benefits Review, HR Executive, Workspan, and Generations. Dr. Piktialis holds a master’s and a doctoral degree in sociology from Boston University. Marcie Pitt-Catsouphes, Ph.D., is the director of the Center on Aging & Work at Boston College. She directs the center’s Global Perspectives Institute and its State Perspectives Institute. She is also an associate professor in the Graduate School of Social Work, with an appointment at the Carroll School of Management. Dr. Pitt-Catsouphes was the coprincipal investigator for the 2006 National Study of Business Strategy and Workforce Development and is the coprincipal investigator of the Age & Generations Study. She was invited to the 2005 White House Conference on Aging as an issue expert

260

About the Editor and Contributors

and recently coedited a special issue of Generations (2007) that focused on aging and work. She was a recipient of the 2007 Work-Life Legacy Award. Dr. Pitt-Catsouphes’s articles have been published in a number of scholarly and practitioner journals. Edward G. Rogoff, Ph.D., is professor in the Department of Management of the Zicklin School of Business at Baruch College, the City University of New York. He received his B.A., M.B.A., M.A., and Ph.D. degrees from Columbia University. Dr. Rogoff serves as the academic director of the Lawrence N. Field Center for Entrepreneurship at Baruch College, teaches, and conducts research in entrepreneurship, particularly relative to minority and later-life issues. He is the author of Bankable Business Plans and coauthor of The Entrepreneurial Conversation. He has published in such journals as the Journal of Business and Entrepreneurship, Journal of Developmental Entrepreneurship, Family Business Review, and Journal of Small Business Management. Dr. Rogoff was a guest coeditor of the Journal of Business Venturing in 2003 and of the Journal of Developmental Entrepreneurship in 2007. He has written articles for the New York Times, Forbes, and Newsday, as well as a being a frequent guest on CNN. Michael A. Smyer, Ph.D., is provost at Bucknell University. Prior to joining Bucknell, he was a professor of psychology at Boston College and codirector of the Center on Aging & Work/Workplace Flexibility (http://www.bc.edu/ agingandwork) where he was the coprincipal investigator of the National Study of Business Strategy and Workforce Development, The Meanings of Work Study, and the Age & Generations Study. Dr. Smyer is a fellow of the American Psychological Association, the American Psychological Society, and the Gerontological Society of America. He is currently on the editorial boards of Generations and The Annual Review of Gerontology & Geriatrics. He is the coauthor of Aging and Mental Health and coeditor of Challenges of an Aging Society: Ethical dilemmas, political issues (2007: Johns Hopkins University Press). Philip B. Stafford, Ph.D., is the director of the Center on Aging and Community at the Indiana Institute on Disability and Community, Indiana University, Bloomington, and adjunct full professor in the Department of Anthropology. He is active in research and publishing around issues of community development for elder-friendly communities. Dr. Stafford is also a senior consultant with the AdvantAge Initiative, a project that supports community planning for aging in twenty-five U.S. communities, and is currently managing an Administration on Aging–funded statewide demonstration planning grant for the Indiana Division of Aging. Dr. Stafford is a founding board member with the Foundation for Alzheimer’s and Cultural Memory and the author of numerous articles on culture and dementia, participatory

About the Editor and Contributors

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research and planning, and the meaning of home for older people. He is the editor of Gray Areas: Ethnographic Encounters with Nursing Home Culture (SAR Press, 2003). Robyn I. Stone, Dr. P.H., is the executive director of the Institute for the Future of Aging Services and senior vice president for research at the American Association of Homes and Services for the Aging (AAHSA). Prior to joining AAHSA, she served as executive director and chief operating officer of the International Longevity Center in New York City. Dr. Stone is the author of more than seventy-five peer-reviewed publications, her work having appeared in Milbank Quarterly, Annual Review of Public Health, Gerontologist, Generations, and Journal of Aging and Social Policy. She has served on the governing boards of both the GSA and the American Society on Aging. Dr. Stone received the Claude Pepper Award from the National Council on Aging and the Key Pharmaceuticals Award for Leadership in Health and Aging from the American Public Health Association. Maria D. Vesperi, Ph.D., is professor of anthropology at New College of Florida. She is also a trustee of the Poynter Institute, a school for journalists, and a former member of the St. Petersburg Times news staff and editorial board. Her academic publications include City of Green Benches: Growing Old in a New Downtown, an ethnography, and The Culture of Long Term Care, a coedited volume of ethnographic research on nursing homes, plus chapters in the recent collections Cultural Diversity in the United States, Qualitative Gerontology, Gray Areas, Reinventing Aging: Baby Boomers and Civic Engagement, Coming Home: International Perspectives on Place, Time, and Identity in Old Age, and The Anthropology of News and Journalism: Global Perspectives. Laura B. Wilson, Ph.D., is director of the Center on Aging and professor of public and community health at the University of Maryland, College Park. She has been principal investigator on a variety of national and international research, training, and demonstration projects related to civic engagement and the 50-plus population, including Legacy Corps and Legacy Leadership Institutes. Legacy Corps has been presented with the 2005 Archstone Award the Gerontological Health Section of the American Public Health Association. Dr. Wilson is director of Retired and Senior Volunteer Program International (RSVPI) and is a fellow of the GSA.

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Index

AARP, 28, 150; study data, 6–11, 17, 80, 176, 180, 202, 219, 225 advocacy coalitions, 157–58 age discrimination, 37, 127 ageism, 125, 127, 139, 140, 227, 245 aging and migration, 170–76 ‘‘aging in place,’’ 110, 134, 169, 179–84 aging population as an asset, 113 ageism in the media, 125–26. See also media images and older folks ‘‘angel investing,’’ 38, 41 asset allocation of investments in 2010s, 70–71 asset transfers in estate planning, 73–76; example scenario, 74 baby boomers and quality of life, 121–23. See also civic engagement; elder care and baby boomers; generational interactions; media images and older folks; philanthropy; sandwich generation; spatial life; workplace changes Baptist Health Systems, 26 Beacon Hill Village, 111, 183 ‘‘best practices,’’ 30 ‘‘brain drain,’’ 18, 28 building equity, 38

caregiving. See elder care; family support Casey-Kirschling, Kathy, 59 civic engagement: new opportunities, 79–83; passionate purpose, 90–91. See also philanthropy civic engagement and chaos theory, 82; contributing factors of nonprofits, 94–96; contributing factors of volunteers, 90–94 Civic Ventures, 117, 147, 155 collaborative dysfunction and chaos theory, 95 community: creating open spaces, 182; ‘‘elderburbia,’’ 178–81; new services, 182; shared sites, 155–57; shared sites, construction of, 156, 161–62; use of existing space, 181 Community Experience Partnership (CEP), 117–18 consultants, 22 continuum of pain and solutions, 20 conventional wisdom, rethinking, 116, 122–23 Corbis, 135–36 CVS Caremark, 21–22 Deere & Co., career development results, 24 deflation, 67

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Index

Depression and financial survival, 67–68 direct-care workers, 241–44 discrimination. See ageism discrimination, as factor to entrepreneurship, 37 diversity training, 24–25 diversity of baby boomers, 119–21, 147 driver’s license, use of: assessment, 195–97; education, 197; interventions, 197–200 driving. See mobility; transportation economic conditions, as factor to entrepreneurship, 37 education: one boomer’s grade-school anecdote, 99. See also lifelong learning programs ‘‘elderburbia,’’ 178–81 elder care and baby boomers, 213–29; challenges and costs, 219–23; effect on family life, 221; effect on work life, 222; formal vs. informal, 226, 235–36; potential crisis, 226–29, 244–46 Elderhostel, 102, 104–5 employee perspectives, 24–26; ideal workplace, 25 employer perspectives on boomer workers, 19, 25–29 employers’ challenges, 19–20; changes in practices and management, 20–29; diversity training, 24–25; management of mature workforce, 23–24; recruitment, 20–22; retention, 23 employers, examples of successful practices, 21–26 empty nest, adapting, 72–73 entitlements, 137 entrepreneurship in later life: evidence of, 34–35; explanation of and allure of, 34, 36; motivations, 37–38; ‘‘have-to’’ vs. ‘‘want-to’’ types, 37–38; strengths, opportunities, and strategies, 38–39 estate planning, 63–76; transfer of assets, 73–76; example scenario, 74 Facebook comments, 148, 151 family: challenges and sandwiching, 223–26; and entrepreneurship, 38, 41;

intergenerational bonds, 158–60, 214–18; multigenerational, 56–57, 215 family aging, 55–57 financial gerontology: definition and history of, 46–48; further study, 57–58; individual aging and population aging, 49–50; three other sub-areas of aging, 50–57 financial planning, 58–60, 63–76, 119; expert advice, 69; key practices and tips, 64–70 flexibility, 27, 38 ‘‘follow the dream,’’ 37 foundations vs. philanthropy, 114 Fourth Age, 111 ‘‘frail elders’’ image, 126–28, 136 ‘‘geezer-bashing,’’ 137. See also Facebook comments generational aging, 53–55 generational interactions, 135–163, 214–18; generations, when separated, 147–52; Facebook comments, 148, 151; media’s role, 151; and politics, 149–52; reciprocity in the future, 160–63; successful programs, 152–54, 156, 161; technology, 148 generativity, 10–11 Glaxo Smith Klein, 24–25 good financial practices, 64–70 Grantmakers in Aging, 115 health administrators, role of, 237 health care workers, shortage, 244–46. See also long-term care and labor force hiring process, employers’ creative outreach, 21–22 Hope Meadows, 157 housing trends, 111, 145. See also community; ‘‘elderburbia’’; retirement relocation images. See media images and older folks Images of Aging conference, 1995, 131 immigrants and civic involvement, 120

Index

infill development, 182 infrastructure changes, 181 innovative practices, other sources, 28 intention to retire, 26 intergenerational activity, pen-pal anecdote, 152. See also generational interactions knowledge management, 27–29 Kroc, Ray, 33–34, 40 Legacy Leadership Institutes (LLIs), 83–89, 102 licensed practical/vocational nurses, role of, 239 lifelong learning model, to pair boomers with nonprofits, 82–84 lifelong learning programs, 99–101, 108–12; factors in participating, 101; sample programs, 102–8 lifespan, stages of, 3–4 ‘‘linked lives,’’ 223 long-term care and labor force: current challenges, 244–46; direct-care workers, 241–44; future trends, 246–47; licensed personnel, 236–40; recommendations for action, 247–50 management of mature workforce, 23–24 management practices, 25–29 meanings of work, 5–11 media images and older folks: advertising, 125–26, 129, 135; advertising analysis results, 131–33, 136; ‘‘aging beat,’’ emergence and challenges, 136–38; conclusions, 141; frailty, 126–28, 136, 148; overconsumption, 129–30, 137; and self-image, 133–34. See also stereotypes middle aging, 51–53 migration, 170–76 mind exercises, 108 mobility needs: considerations, 182; driving cessation, 200; safe driving interventions, 197–200; transportation

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alternatives, 201–5. See also driver’s license; transportation multigenerational relations. See generational interactions newspaper readership, 138, 139–40 New York and poverty, 119 New York Community Trust, 115–16, 119, 120 nurse practitioners, role in long-term care, 237–38 OASIS, 103–4 older Americans as natural resource, 147, 162 open spaces, creating, 182 opportunities for entrepreneurship, 39–41 patterned behavior, and chaos theory, 95 phased retirement, 29 philanthropy: Atlantic Philanthropies, 116, 117; barriers to being engaged in community, 118–19; Civic Ventures, 117; Community Experience Partnership (CEP), 117–18; compared with other social forces, 113–14; vs. foundations, 117; neutrality, 113, 115 pilot program, workplace knowledge transfer, 29 program success, intergenerational, 152–54, 156, 161 quality of life, 121–23 recruitment, 20–22 redesigning work, 17–19, 29–30 registered nurses, role of, 238–39 resources, lack of, as factor to work, 37 retention, 23 rethinking conventional wisdom, 116, 122–23 retirement relocation, 172–76; ‘‘elderburbia,’’ 178–81 retirement, 11–12; financing, 177; preparation, 99–112; timing of, 176

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sandwich generation, 56–57, 223–26 self-employment, 34–36, 236, 241. See also entrepreneurship services, community, new, 182 The Simpsons, 151 snowbirds, and working for CVS, 21 social workers, role in long-term care, 240 sources of innovative practices, 28 spatial life, concept of, 169–70 stages of life, 3–5 stereotypes of older Americans, 24, 25, 135, 140, 146. See also media images and older folks stereotyping and chaos theory, 94, strategies for entrepreneurship, 39–41 Sun City, 155, 176–77, 178; alternatives to, 173, 175 Swampscott, MA, 156 systemic commitment and chaos theory, 95 talent management, changes, 20–29 Third Age, 100 traditional retirement, changes, 17, 30 transfer of assets, 73–76; example scenario, 74 transportation continuum, 191

transportation: critical driving skills, 193–95; current and projected data, 189–91; safe driving 192–97. See also driver’s license, use of use of existing spaces, 181. See also community volunteerism. See civic engagement; philanthropy ‘‘waiting in place,’’ 23, 146–47 wealth accumulation, 64; vs. expenditure, 65 Westpac, 21–22 work, factors: financial, 5–7; generativity, 10–11; personal, 7–9; social, 9–10 work, many meanings of, 5–11 work, redesigning, 17–19, 29–30 work and retirement issue, 11–12; employer’s challenges, 19–20 workplace changes, care-related, 218–19, 221, 222 yoga, 109 Your Encore, 22