Family Economics Review [1993, Volume 6, Number 4]

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M I L y
N 0 M I C s I • • • 1993 Vol. 6 No.4
Feature Articles • 2
9
Loans Between Baby-Boomer Householders
and People in Other Households
Gearldean Johnson and Julia M. Dinkins
Long-Term Care Trends
Nancy E. Schwenk
Research Summaries • 19 Measuring the Economic Status of the Elderly
21 The Development and History of the Poverty Thresholds
24 Work and Family: Women in Their Forties
26 Per Capita Food Spending Trends Upward
Regular Items • 28 Recent Legislation Affecting Families
29
30
32
33
34
35
37
Data Sources
Charts From Federal Data Sources
Journal Abstracts and Book Summary
Cost of Food at Home
Consumer Prices
Reviewers for 1993
Index of Articles in 1993 Issue
PROPERTY OF THE
LIBRARY
NOV 18 1993
Univers,i.t.y. of No~t'l Carolina .,.., ...
2
Feature Articles •
Loans Between Baby-Boomer
Householders and People in
Other Households
By Gearldean Johnson 1
Associate Professor
Tennessee State University
Julia M. Dinkins
Consumer Economist
Family Economics Research Group
When families need financial assistance, they may turn to people in other
households. The 1987-88 National Survey of Families and Households
was used to examine select socioeconomic characteristics of baby-boomer
household heads who exchanged loans of $200 or more over a 5-year
period with people in other households. Median loans are reported. A higher
percentage of lenders and recipients had at least 1 year of college, three or
more people in the household, an income above $50,000, and were home­owners.
A higher percentage of lenders were male, whereas a higher per­centage
of recipients were female. Results are beneficial to professionals
interested in exchange theory, the degree of financial interdependence
between households, and the characteristics of baby boomers involved in
this type of financial exchange.
ost U.S. families can be
described as relatively
autonomous units. Accord­ing
to Saluter (1 0), 96
percent of the 113 million currently
married adults in the United States
maintain their own home. Even among
the 4.7 million young married adults
(20 to 24 years old), the percentage that
live independently is high (88 percent).
Although U.S. families tend to be self­reliant,
they are sometimes involved
in informal financial exchanges with
individuals in other households. These
exchanges occur for different reasons;
1Visiting Professor, Family Economics Research
Group.
as a result there are different expecta­tions
for repayments (4). The amount
of available resources, together with
demand on these resources, may cause
one household to depend on another
for fmancial support. Divorced, older
parent, and young-adult households
may be especially vulnerable (7).
Establishing a household, paying for a·
college education, or dealing with the
consequences of a high debt load may
be other reasons families are involved
in interhousehold financial exchanges.
Family Economics Review
·- - --
Previous Research
Families use different types of informal
exchanges to atisfy demands placed
on their household or to assist others.
Williams (12) found that the type and
frequency of interhousehold exchanges
varied for Mexican-American and
Anglo families by income and ethnic
group. Hoyert (6) determined that some
families were more likely to receive or
provide assistance with household
tasks, whereas others were more likely
to receive or give financial assistance.
A Bureau of the Census study indicated
that those who provided financial assis­tance
to people in other households
were more likely to be separated or
divorced than married or single. Men
were more likely than women to pro­vide
financial assistance. Also, the life­cycle
status of both the provider and
recipient determined whether financial
assistance was provided or received (7).
Other studies have focused on combined
involuntary and voluntary support pay­ments
to individuals in other households
(7), the provision and receipt of house­hold
goods and services by ethnicity
and income levels (12), and household
and financial assistance from parents
to children (6). Still others have
highlighted the influence of family
background and the life cycle on
interhousehold transfers (9), and the
influence of racial differences on
intergenerational financial flows
between parents and their children
(students versus nonstudents) (5).
Eggebeen and Hogan (3) determined
that among people age 19 and older,
those more likely to give to their parents
were Mexican and male; had more
education, more interaction with their
parents, more living siblings, and a
parent whose health status was poor;
and provided coresidence to parents.
Those below the poverty level were
less likely than those above the poverty
1993 Vol. 6 No.4
level to give money to their parents.
Findings of this study also indicated
that there was little reciprocity in inter­generational
exchanges.
In a different study, Eggebeen (2)
reported that giving advice followed
by giving money and receiving advice
were the most typical forms of exchange
for older adults (age 55 or more). Older
adults rarely received money from their
adult children, and fewer elderly Black
than elderly White parents gave money,
household assistance, or advice to their
children.
Current Research
The research reported in this article
provides additional insight on inter­household
exchanges. Unlike other
studies, this study examines the charac­teristics
of individuals born between
1946 and 1964, sometimes referred to
as baby boomers, who lent $200 or
more over a 5-year period to, or who
received loans of $200 or more from,
relatives and nonrelatives in other
households.
The baby-boom generation is currently
in a life-cycle stage that places many
demands on its members' resources.
Some members are establishing house­holds,
some have child-care needs,
others may be repaying college loans,
some are paying or saving for their
children's education, and some are
helping others financially. In 1990, total
expenditures of boomers (those 26 to 44
years old) for goods and services were
greater, on average, than total expendi­tures
by adults not in this age range (1).
The baby boomers have been described
as members of the Sandwich Generation­a
group that may need to provide assis­tance
to children or aging parents and
make financial plans for retirement
simultaneously (8). Questions addressed
are: (1) At this stage of the life cycle, to
what degree are baby boomers giving
loans to and receiving loans from people
in other households? (2) Who are the
givers and who are the recipients of
these interhousehold loans? (3) To
whom and from whom are these inter­household
loans made? (4) For what
specific purposes, if any, are loans
made and received?
Source of Data and Sample
Data for this study are from the 1987-88
National Survey of Families and House­holds
(NSFH).2 The NSFH collects
data on a range of American family life
issues, including couple and parent-child
interactions, economic and psychologi­cal
well-being, family attitudes, and
adult family transitions (1 1). The NSFH
is a national probability sample of
13,017 respondents (19 years old and
older). This includes an oversampling
of minority, single-parent, stepparent,
recently married couple, and cohabiting­couple
households. In each household,
one adult was randomly selected as the
primary respondent. For this study, only
respondents who were householders
were selected for analysis. Householders
were determined by two questions: ( 1)
"Is R [respondent] the only adult, or is
R's [respondent's] spouse the only
other adult age 19 or over in the house­hold?"
and (2) "In whose name is this
home owned or rented?" There were
11,858 householders.
2-rhe National Survey of Families and Households
was funded by a grant (HD21 009) from the Center
for Population Research of the National Institute
of Child Health and Human Development. The
survey was designed and carried out at the Center
for Demography and Ecology at the University of
Wisconsin-Madison under the direction of Larry
Bumpass and James Sweet. The field work was
done by the Institute for Survey Research at
Temple University.
3
In response to questions on gifts and
loans, householders provided information
on exchanges between their households
and other households that were made
over a 5-year period before the interview.
(For the remainder of the paper, this is
the period under discussion.) To the
first in a series of questions on gifts
and loans, householders indicated (I)
whether they or their spouse or partner
had given gifts or loans worth $200 or
more to others not living in their house­hold
during the past 5 years or (2) if
they had received gifts or loans worth
$200 or more from people in other
households during that time.
In answer to the first question about
giving gifts and loans,3 householders
could have included gifts or loans to help
others purchase a first home. However,
in answer to the fust question about
receiving gifts or loans,4 householders
were not to include any money they
received from others to help them
purchase a fust home that had been
reported earlier in the interview. Conse­quently,
the amount reported may be
underestimated.
Next, separate questions on gifts and
loans were asked. Whereas gifts received
or given could consist of money and/or
goods, loans consisted of money. Re­spondents
were asked: "To whom did
you loan more than $200 during the
past 5 years?" and "Who on this list [of
relatives and nonrelatives] loaned you
more than $200.00 during the past 5
years?" The focus of this study is on
loans only. Householders specified the
total amount that they lent to people
outside the household and the total
3"Duri ng the past 5 years, did you give or loan
more than $200.00 to anyone who was not living
in your household at that time?''
4"During the past five [sic] years have you (or
your husband/wife/partner) received a gift or loan
worth more than $200 at any time from anyone
not living with you at the time. (Do not include
money to help purchase you[r] first home that you
already told me about.)"
4
Distribution of households: Loans 1 between households over a
5-year period
68%
Baby Boomers
0 Did not lend and did not receive a loan
• Received a loan only
1$200 or more.
amount that they received from different
people not living with them during the
5-year period. Also, householders indi­cated
for what specific reasons, if any,
the interhousehold loans were made and
received. Total loans from all sources
were computed by adding the amount
lent/received from parents, siblings,
other relatives (excluding children),
and nonrelatives. Few boomers were
old enough at the time of the survey to
have adult children living independently
in other households; therefore, loan
exchanges with these children were
negligible. Consequently, exchanges
with children are excluded from the
analysis. All percentages and medians
are weighted.
Distribution of All Householders
Forty-four percent of the householders
were baby boomers 23 to 41 years old
and 56 percent were nonboomers.
Among boomer householders, almost
one-third (32 percent) were involved in
loan exchanges with people in other
75%
1%
Others
0 Lent only
• Provided a loan and received a loan
households (see figure). ("Others" and
"people in other households" are used
interchangeably.) Thirteen percent only
lent to others, and 14 percent only re­ceived
loans from others. Five percent
provided loans and received loans.
Nonboomers were less likely than
boomers to be involved in interhouse­hold
loan exchanges (25 percent). Of
those who participated in interhouse­hold
loan exchanges, nonboomers were
more likely to be givers than receivers.
Characteristics of Boomer
Householders Who Gave and
Received Loans
For the remainder of this article, data
are on boomer householders who speci­fied
the amount of loans given andre­ceived.
Ninety-six percent reported the
amount lent, and 98 percent reported
the amount received. The median loan
made by these boomers was $700; the
median amount received was $2,000
(table I).
Family Economics Review
Table 1. Baby-boomer householders who specified amount of loans over a 5-year period, by their
socioeconomic characteristics, 1987-88
Lenders Recipients
Characteristic Percentage Percentage Median amount
of those Median amount for of those who for those who
who lent those who lent received a loan received a loan
All 100 $700 100 $2,000
Householder
Age (years)
23- 31 44 500 51 1,500
32-41 56 900 49 2,400
Education
Less than high school 7 500 5 500
High school 34 590 32 1,295
Some college 30 700 30 1,800
College degree 29 1,000 33 2,750
Gender
Men 53 800 47 2,000
Women 47 590 53 1,970
Household
Number of people in household
One 13 700 10 1,500
Two 23 700 22 1,800
Three 20 500 21 2,000
Four 29 900 26 2,200
Five and more 15 600 21 2,000
Income1
Less than $10,000 7 460 8 1,000
$10,000 - $20,000 13 500 16 1,000
$20,001 - $30,000 17 500 20 1,300
$30,001 - $40,000 16 600 16 2,000
$40,001 - $50,000 12 700 13 2,000
$50,001+ 28 1,000 20 5,000
Other2 7 550 7 1,500
Housing tenure
Own 63 800 56 3,000
Rent 37 500 44 1,000
1In the NSFH, there are two variables for total household income. One excludes income from interest, dividends, and other investments. The income reported
here includes that of the respondent and spouse from these sources.
20ther = no answer and inapplicable.
1993 Vol. 6 No. 4 5
•
6
When boomers
received loans,
parents were the
predominant source
of financial support.
When boomers
supplied loans,
siblings and
nonfamily house­holds
benefited.
Table 2. Baby-boomer householders who lent $200 or more over a
5-year period
Lenders
To whom loan Percentage 1 of Median amount for
was given those who lent those who lent
Parents 13 $1,000
Siblings 44 590
Other relatives 9 500
N onrelati ves 45 650
1Does not add to 100 because baby-boomer householders may lend to more than one source.
Whereas a higher percentage (56 per­cent)
of boomer lenders were older
(ages 32 to 41), a higher percentage
(51 percent) of boomer recipients were
younger (ages 23 to 31) (table 1). Fifty­nine
percent of boomers who lent to
others and 63 percent of those who
received loans from others had at least
1 year of college.
Over half of boomer lenders were men
(53 percent); median amount lent was
$800. Over half of boomer recipients
were women (53 percent); median loan
received from others was $1,970. About
two-thirds of lenders (64 percent) and
recipients (68 percent) had three or
more people in their household.
Twenty-eight percent of boomers who
lent and 20 percent of those who re­ceived
loans had a household income
above $50,000. Boomer lenders in this
income category gave a median loan of
$1,000 and boomer recipients acquired
a median loan of $5,000. Nearly two­thirds
(63 percent) of the lenders and
over half (56 percent) of the recipients
were homeowners. Owners who were
lenders provided $800 to others and
homeowner recipients obtained $3,000
from others.
Median Loans Given and
Received, by Source
Boomers were more likely to lend to
nonrelatives (45 percent) and siblings
(44 percent) than to parents or other
relatives (table 2). For boomers who
lent to nonrelatives, the median loan
was $650; for those who lent to
siblings, the median loan was $590.
Thirteen percent of the boomers pro­vided
loans to their parents. For these
boomers, the median loan was $1,000.
For those who provided a loan to other
relatives (9 percent), the median loan
was $500.
Boomers who specified the amount
they received obtained loans from their
parents (71 percent), nonrelatives (16
percent), siblings (15 percent), and/or
other relatives (11 percent) (table 3).
Among those who said how much
was received from parents, the median
amount was $2,000. For those who said
how much was received from siblings,
other relatives, and nonrelatives,
median loans ranged from $1,000 to
$1,500.
Family Economics Review
Table 3. Baby-boomer householders who received loans of $200 or
more over a 5-year period
Parents
Siblings
From whom loan
was received
Other relatives
Nonrelatives
Recipients
Percentage 1 of Median amount
those who for those who
received loans received a loan
71 $2,000
15 1,000
11 1,500
16 1,000
1Does not add to 100 because baby-boomer householders may receive loans from more than one source.
Specific Reasons Loans Given
and Received
The distribution for those who lent
showed that 22 percent provided loans
for transportation; 18 percent gave loans
for business concerns, legal matters, and
debt problems; 15 percent for housing;
and 16 percent for other items. Twenty­nine
percent lent for no specific reason.
The distribution for those who received
loans revealed that 24 percent obtained
them for transportation; 16 percent for
business concerns, legal matters, and
debt problems; 23 percent for housing;
and 18 percent for miscellaneous items.
Nineteen percent received loans for no
specific reason.
Summary and Conclusions
The major finding of this study is that
very little money was transferred be­tween
boomer households and people
in other households. Only one-third of
boomers gave and/or received loans of
$200 or more over a 5-year period. It
appears that few households were
exchanging loans-only 5 percent both
gave and received loans. Also, boomers
received much more money than they
lent. When boomers received loans,
1993 Vol. 6 No.4
parents were the predominant source
of fmancial support. When boomers
supplied loans, siblings and nonfamily
households benefited.
Loans of $200 and more over a 5-year
period may not be an indication of long­term
financial need or a change in long­term
economic status. However, this
type of exchange may reflect short-term
demands on scarce household resources
and the degree of reciprocity between
households.
Whether these loans occurred because
of money needed for a down payment on
a vehicle, a downpayment on a house
(excluding loans boomers received to
help with downpayment on a first home),
a mortgage payment, debt consolidation,
medical or legal expenses, taxes, busi­ness
expenses, or simply convenience,
boomer households used loans to man­age
their resources and to help others
when the need arose. As Williams (12)
states, "Alternatives exist for manag­ing
with economic uncertainty, and
inter-household exchange cannot be
overlooked as a viable economic
alternative ... " (p. 251).
Loans may reflect life course events.
According to MacDonald (9), events
related to family formation rather than
economic threats are associated with
interhousehold flows of gifts and loans.
He concludes: "On the whole the events
that generate larger inter-[household]
transfers via gifts and loans are marriage,
and migration-two fairly predictable
life course changes. Families seem to
provide more gifts and loans to help
their offspring cope with the ordinary
than they respond to relatively rare
events that may cause more severe
financial strain, like divorce or spells
of nonemployment" (pp. 23-24).
This study focused on loans of money
between baby-boomer householders
and people living in other households.
However, the informal support network
among households assumes a much
wider role for contemporary families (7).
Families may provide and/or receive
assistance with daily activities such as
transportation, child care, and shopping.
Therefore, a study of nonfinancial inter­household
support between baby boomers
and others would provide additional
information on the extent and type of
support systems used by this large
group.
7
References
1. Dinkins, J.M. 1993. Expenditures of younger and older baby boomers. F amity
Economics Review 6(2):2-7.
2. Eggebeen, D.J. 1991. Patterns of Giving and Receiving in the Later Life Course.
Population Issues Research Center. Working Paper No. 1991-09. Institute for Policy
Research and Evaluation, The Pennsylvania State University.
3. Eggebeen, D.J. and Hogan, D.P. 1990. Giving Between the Generations in
American Families. Population Issues Research Center. Working Paper No. 1990-21 .
Institute for Policy Research and Evaluation, The Pennsylvania State University.
4. Gaughan, J.P. and Ferman, L.A. 1987. Toward an understanding of the informal
economy. The Annals of The American Academy of Political and Social Science
493:15-25.
5. Goldscheider, F.K. and Goldscheider, C. 1991. The intergenerational flow of
income: Family structure and the status of Black Americans. Journal of Marriage
and the Family 53(2):499-508.
6. Hoyert, D.L. 1991. Financial and household exchanges between generations.
Research on Aging 13(2):205-225.
7. Jennings, J.T. and Bennefield, R.L. 1992. Who's Helping Out? Support Networks
Among American Families: 1988. Current Population Reports, Household Economic
Studies. Series P-70, No. 28. U.S. Department of Commerce, Bureau of the Census.
8. Junk, V.W., Stenberg, L.A., and Anderson, C.A. 1993. Retirement planning for
the Sandwich Generation. Journal of Home Economics 85(1):4-11.
9. MacDonald, M.M. 1989. Family Background, the Life Cycle, and Inter-Household
Transfers. A National Survey of Families and Households, NSFH 13. Center for
Demography and Ecology, University of Wisconsin-Madison.
10. Saluter, A.F. 1992. Marital Status and Living Arrangements: March 1991.
Current Population Reports, Population Characteristics. Series P-20, No. 461.
U.S. Department of Commerce, Bureau of the Census.
11. Sweet, J., Bumpass, L., and Call, V. 1988. The Design and Content of the
National Survey of Families and Households. Working Paper NSFH-1. Center
for Demography and Ecology, University of Wisconsin-Madison.
12. Williams, F.L. 1991. Interfamily economic exchange: A function of culture
or economics? Lifestyles: Family and Economic Issues 12(3):235-252.
8 Family Economics Review
1993 Vol. 6 No.4
•
Long-Term Care Trends
By Nancy E. Schwenk
Consumer Economist
Family Economics Research Group
The number of Americans age 65 and older is projected to grow by 73 percent
between 1992 and 2020. Along with an increased life expectancy comes an
increased likelihood of illness and disability. Greater longevity will lead to an
increase in the demand for long-term care services for the elderly. Although
long-term care is commonly identified as nursing home care, daily help with
health and personal needs, either in the home or in the community, is also
part of long-term care. Nursing home care, which averages over $30,000 a
year, is paid for mainly out of pocket and by Medicaid. Medicare and private
insurance contribute very little. A number of alternatives to nursing home
care, such as retirement communities and home health care, are presented.
[!] he provision of long-term
care for the elderly is
considered to be one of the
country's most challenging
problems. The United States is experi­encing
a dramatic aging of its popula­tion.
In 1992, there were 31.8 million
Americans age 65 or older. That number
is projected to grow to about 55 million
by 2020 (J). The estimated life expec­tancy
for people who turned age 65 in
1992 is 19.0 additional years for females
and 14.9 years for males (1 4). During
these years, the likelihood of suffering
acute illnesses and chronic disabling
conditions increases greatly. The purpose
of this paper is to describe the nature of
long-term care, the costs and how they
are paid, the care received by elderly
disabled veterans, and alternatives to
nursing home care.
By the year 2000, over 8 million
elderly Americans will need some form
of long-term care for chronic illness
or disability (1). The dependent elderly
continue to receive the most care from
their families, particularly from females
(nearly 75 percent) (9). The provision of
informal care by family members keeps
public expenditures down and provides
a better sense of independence for the
elderly family member. However,
unpaid, informal caregiving is declin­ing
as more women enter or reenter the
labor force. Thus, many of the elderly
who might have been cared for at home
by family members will require formal
long-term care. The need for an answer
to the question of how to deliver and
pay for long-term care for the elderly is
becoming increasingly urgent.
9
Long-term care is often equated with Table 1. Certified 1 nursing facilities, beds, and beds per thousand
nursing homes, though it encompasses elderly, by State, 1991
community-based services, including
in-home services, as well. Long-term Total Total beds Beds per 1,000
(usually defined as 6 months or longer) State certified in certified elderly,
care consists of medical, nursing, social, facilities facilities 65 and over
and personal services provided in a
United States 15,913 person's home, in the community, or 1,690,481 52.8 Alabama 219 22,289 41.8
in an in titution (1 1). Alaska 15 875 38.4
Arizona 132 15,595 30.4
Nursing Home Care Arkansas 248 26,338 72.4
California 1,290 132,032 40.2
There are 19,100 nursing homes in the
Colorado 204 19,854 59.8
Connecticut 240 28,669 62.2 United States (1), and nearly 16,000 Delaware 41 4,471 52.7
of these homes had been certified for District of Columbia 16 3,138 39.3
Medicare and/or Medicaid in 1991 (4). Florida 554 65,837 26.3
The number of nursing home beds per Georgia 364 38,528 55.6
1 ,000 population age 65 or older varies Hawaii 43 3,505 26.2
Idaho 70 5,659 48.2 greatly across the country, from a low
lllinois 792 100,587 69.3 of 26 in Hawaii and Florida to a high of Indiana 590 64,263 92.2
108 in Iowa. The national average is 53 Iowa 463 44,950 108.3
(table 1) (4). Most (75 percent) nursing Kansas 415 29,767 85.5
homes are for profit, 20 percent are non- Kentucky 282 24,211 51.1
profit, and 5 percent are operated by Louisiana 327 36,681 75.6
Maine 146 10,080 60.6 Federal, State, and local governments (1).
Maryland 217 27,665 51.5
Massachusetts 540 51 ,594 61.5
Those most likely to need nursing Michigan 439 49,927 45.0
home care are never-married people Minnesota 472 48,403 87.4
who lack a potential caregiver and Mississippi 162 14,691 43.9
married women who outlive their Missouri 469 47,446 64.8
Montana 99 7,056 69.2 spouses. Seventy-five percent of
Nebraska 237 18,464 82.1 nursing home residents are women. Nevada 36 3,497 29.9
Of people age 85 or older, one in four New Hampshire 76 7,321 55.0
women live in a nursing home, com- New Jersey 306 44,317 40.8
pared with one in seven men (1). In New Mexico 7l 6,558 38.6
addition to advanced age, inability to New York 619 103,516 43.0
North Carolina 320 29,658 35.3 perform the basic activities of daily North Dakota 83 7,123 80.8 living (ADL's)1 indicates a need for Ohio 988 92,518 65.6
nursing home care (9). Although half Oklahoma 409 33,758 78.7
of nursing home residents stay for 6 Oregon 176 15,165 40.8
months or less while receiving rehabili- Pennsylvania 690 88,591 48.2
tation services (1), 1 in 4 people over Rhode Island 100 9,808 64.9
South Carolina 147 14,099 34.9 age 65 will need nursing home care for South Dakota 118 8,530 84.1 at least 1 year, and 1 in 10 for 5 years or Tennessee 300 35,551 55.2 longer (8). Texas 1,127 115,148 64.0
Utah 90 6,913 47.3
1 Activities of daily living are: Bathing, dressing, Vermont 48 3,585 53.3
grooming, toileting, transferring from a bed or Virginia 258 30,989 44.9
chair independently, and moving about (9). Washington 287 28,256 50.6
West Virginia 122 10,849 40.7
Wisconsin 418 49,297 76.1
Wyoming 38 2,859 68.1
1Certified for Medicare and/or Medicaid.
Source: American Health Care Association, 1992, Issue and Data Book for Long Term Care (4).
lO Family Economics Review
Costs and Payments for
Nursing Home Care
Nursing home care expenditures rose
12.8 percent from 1990 to 1991 (13),
compared with a 4.2-percent increase in
the overall inflation rate (15). In 1991,
the total expenditure on nursing home
care in the United States was $59.9 bil­lion
( 13), up from $1.0 billion in 1960
and $4.9 billion in 1970 (table 2). The
proportion of total personal health care
expenditures allocated to nursing home
care also rose, from 4.1 percent in 1960
to 9.1 percent in 1980 through 1990 (6).
Although a small percentage of this
total was used for short-term, post-acute
care, care of the mentally retarded, and
care of younger nursing home patients,
most of these funds were used for long­term
care for the elderly. The Health
Care Financing Administration (HCFA)
estimates that the cost of nursing home
care will reach $86 billion in 1995 and
$131 billion in 2000 (12).
The cost of care for individuals in
nursing homes varies greatly, depend­ing
on the level of care provided, the
needs of the resident, and the location
of the facility ( 4). In 1990, nursing
home care averaged $31,000 a year,
or $86 a day (6). The lowest priced
nursing homes, at about $20,000 per
year, were found in rural areas, whereas
the highest priced homes, up to $60,000
per year, were found in major cities (8).
By region of the country, the costs are
highest in the Northeast, followed by
the West, the Midwest, and the South
(1). Daily rates always include room,
board, nursing care, therapeutic services,
and social activities. Services such as
physical and speech therapy are usually
charged separately (4).
Out-of-Pocket Pay~ents
In 1990, 45 percent of the cost of nursing
home care was paid out of pocket by
patients and/or their families (fig. 1,
p. 12) (4). In 1960, before establishment
of the Medicare and Medicaid programs,
patients paid almost 80 percent out of
pocket for nursing home care (table 2)
(6).
Table 2. Total personal health care expenditures and nursing home care expenditures, by selected source of
payment: Selected years 1960-90
1960 1970 1988 1989 1990
Source of payment Nursing Nursing Nursing Nursing Nursing
home home home home home
Total care Total care Total care Total care Total care
Amount in billions
Personal health care $23.9 $1.0 $64.9 $4.9 $482.8 $42.8 $529.9 $47.7 $585.3 $53.1
expenditures
Out-of-pocket payments 13.3 0.8 25.6 2.3 119.3 20.6 126.1 20.8 136.1 23 .9
Third-party payments 10.5 0.2 39.3 2.5 363.5 22.2 403.8 26.9 449.2 29.3
Private health insurance 5.0 0.0 15.2 0.0 154.1 0.5 169.6 0.5 186.1 0.6
Other private 0.4 0.1 1.7 0.2 16.8 0.8 19.0 0.9 21.3 1.0
Government 5.1 0.1 22.4 2.3 192.6 20.9 215.2 25.4 241.8 27.7
Federal 2.1 0.1 14.6 1.4 141.7 12.6 158.8 16.4 177.2 17.2
Medicare 7.2 0.2 88.5 1.0 100.3 3.8 108.9 2.5
Medicaid 2.7 0.7 29.4 10.7 33.6 11.7 40.6 13.7
Other 2.1 0.1 4.7 0.4 23.9 1.0 24.9 0.9 27.7 1.0
State and local 3.0 0.1 7.8 0.9 50.9 8.3 56.3 9.0 64.6 10.5
Medicaid 2.3 0.6 22.7 8.3 25.6 8.9 30.7 10.5
Other 3.0 0.1 5.5 0.3 28.2 0.0 30.8 0.0 33.9 0.1
Total Medicaid 5.1 1.4 52.1 19.0 59.2 20.6 71.3 24.1
Source: Levit, K.R., et al., /99/ , National health expenditures, 1990, Health Care Financing Review 13( I ):29-54.
1993 Vol. 6 No.4 11
Medicare
Contrary to popular belief, only a small
portion of nursing home costs are paid
for by Medicare or private insurance.
Medicare, a Federal health insurance
program for the aged and disabled
implemented in 1966, paid only 4.7
percent of nursing home costs in 1990;
private insurance policies paid only
1.1 percent (fig. 1) (4). Medicare Part A
(hospital insurance) provides for up to
100 days of inpatient, skilled nursing
facility care following (within 30 days)
a hospitalization of 3 days or more per
benefit period. A benefit period begins
when the beneficiary first enters a
hospital and ends when there has been
a break of at least 60 consecutive days
since inpatient hospital or skilled nursing
care was provided. The first 20 days of
skilled nursing facility care are fully
covered. For days 21 through I 00
there is a co-insurance payment for the
benefit ($81.50 per day in 1992) (Hi).
Medicare pays nothing after 100 days of
skilled nursing facility care. No benefits
are provided for intermediate care or
custodial care under Medicare (3).2 •
The HCFA has considered adding long­term
care benefits to Medicare. How­ever,
demonstration projects conducted
during the 1980's were inconclusive
with respect to costs, so long-term care
was never incorporated into Medicare
(11 ).
2Skilled nursing care is for those who need inten­sive,
24-hour-a-day care and supervision by a
registered nurse. Intermediate care is for those
who require 24-hour supervision and nursing
assistance but do not meet the medical criteria
for skilled care. Custodial care is for those who
require room, board, and help with personal care
but may not require health care services (3).
12
Figure 1. Nursing facility payments, 1990
Medicaid
(Federal)
Medicare 4.7%
Other 3.6%
19.8%
Medicaid
(State)
Private
1·1% insurance
Out-of-pocket 45.0%
Source: American Health Care Association, 1992, Issue and Data Book for Long Term Care,
Washington, DC (4).
Medigap
Another common misconception is
the belief that Medicare Supplemental
Insurance-commonly called medigap-­will
pay for nursing home care. Medigap,
a private health insurance option that
supplements Medicare coverage, gener­ally
pays for the noncovered costs of
Medicare-covered services, such as
hospital deductibles and physician
copayments, but does not pay for long­term
care (3, 13).
Medicaid
The Medicaid program is the major
provider of financing for long-term
care. This program originated in 1965
as a jointly funded cooperative venture
between the Federal and State Govern­ments
to help States provide more
adequate medical care to eligible low­income
Americans of all ages (16). In
1990, Medicaid paid for 45 percent
of all nursing home costs and covered
about 61 percent of all nursing home
residents (3).
Increases in spending for Medicaid
over the past few years have exceeded
increases in the Consumer Price Index
and in the number of beneficiaries. The
growth in Medicaid spending reflects:
• The accelerated rate of inflation for
medical and health-related services.
• Technological advances that keep
very low birth weight and critically
ill people alive but in need of
continuing expensive care.
• The increase in the number of very
old and disabled people requiring
long-term care.
• The increase in the rates of reim­bursement
to health care providers.
• The economic recession and
Federal legislation that increased
the size of the covered population
(16).
Family Economics Review
Between 1990 and 1991, there was a
34.4-percent increase in Medicaid pro­gram
benefits. Increased utilization and
higher numbers of elderly have caused
the program to expand so much that
long-term services are the primary
component of many State Medicaid
budgets (1 3).
The Medicaid program varies greatly
from State to State. Eligibility standards,
services, and the rates of payment are
determined by each State. Then individ­ual
State programs are administered
within broad Federal guidelines (1 6).
A person who is eligible in one State
might not be eligible in another. Medi­caid
operates as a vendor payment pro­gram
and makes payments directly to
providers. Those providers participating
in Medicaid must accept the Medicaid
reimbursement level as payment in full
(16). Various studies have determined
that the cost of nursing home care pro­vided
to Medicaid patients is subsidized
by private patients, who make higher
payments (5). As a result, private
patients are usually preferred and
Medicaid recipients often have diffi­culty
gaining access to nursing homes.
Although much of the Medicare Cata­strophic
Coverage Act of 1988 was
later repealed, it had a major impact on
Medicaid eligibility. Additional income
and assets for the spouse at home were
protected under the "spousal impover­ishment"
provision {16). States must
allow the spouse at home to retain a
minimum monthly income and a State­determined
amount in liquid assets or
resources,3 in addition to the couple's
home, before the resources of the nursing
home resident are used to pay the cost
of care. Minimum amounts will increase
yearly until 1997 and only apply to
nursing home payments (3).
3 As of July 1992, the monthly maintenance
allowance had to be at least $984 and the amount
in liquid assets or resources at least $13,790 (3).
1993 Vol. 6 No.4
Generally, Medicaid eligibility requires
impoverishment. However, elders with
median and even higher income and
resources often qualify for nursing
home care under Medicaid while pre­serving
the bulk of their assets for their
heirs without repayment of public costs.
Financially sophisticated elderly people
can work with private "elder law"
attorneys, accountants, and financial
planners to shelter income and assets.
Sheltering techniques include: Inter­spousal
and other legal transfers, trusts,
purchase of exempt assets, "intent to
return" to the home, life estates, joint
tenancy with right of survivorship, gift
and estate planning, durable power of
attorney, guardianships, divorce, reloca­tion,
care contracts, and nonsupport
suits (7).
Long-Term Care Insurance
Long-term care insurance, another
option for financing long-term care, is
relatively new. As of late 1991, over
140 companies sold long-term care
policies or permitted conversion of life
insurance to long-term care insurance.
More than 1.92 million policies were in
effect by this time, covering 3 percent
of the elderly population (1 1). Private
long-term care policies are usually
limited to Medicare-certified nursing
homes (3). Most companies will not
sell a policy to someone after age 79;
some have earlier cut-offs (3).
A good long-term-care policy would
provide:
• The amount of the daily nursing­home
cost that exceeds an individ­ual's
discretionary income. For
example, if the daily nursing-home
cost is $100 and the individual's
daily income from pensions, Social
Security, etc., is $30, the policy
should insure for $70.
• Inflation protection that adds 5
percent to the original benefit each
year.
• By the year 2000,
over 8 million elderly
Americans will need
some form of long­term
care for chronic
illness or disability.
13
• Waiver of premiums while policy­holder
is collecting benefits.
• A reasonable wait before coverage
begins.
• Coverage for any level of care.
• No hospitalization requirement
before collecting benefits.
• Coverage for mental disorders and
frailty.
• Guaranteed renewable to prevent
cancellation (8).
Cost of long-term insurance depends on
the age of the policyholder. For a basic
policy, a 55-year-old might pay $230 a
year, a 68-year-old $890 a year, and a
75-year-old $1,650 a year (8). Because
relatively few people face long nursing
home stays involving catastrophic
expense, long-term care lends itself to in­surance
and risk pooling in which many
people contribute to a fund to cover the
large expenses of a few.
Care for Elderly Veterans
The Department of Veterans Affairs
funds three types of nursing home care
for elderly, disabled veterans: VA­operated
nursing home care units, the
VA State Home Nursing program, and
the VA Community Contract Nursing
Home program. The 129 nursing home
care units are based in VA hospitals and
provide extensive nursing home care to
about 13,500 veterans. The 56 State
home facilities provide a wide range of
nursing home care with costs shared by
the VA, veterans, and States for about
11,200 veterans. Under the Community
Contract Nursing Home program, the
VA contracts with about 2,800 commu­nity
nursing homes, enabling veterans
to be cared for in facilities near their
homes. Veterans with non-service­connected
disabilities may receive care
for up to 6 months; veterans with service­connected
disabilities may be cared for
14
Table 3. Nursing home care expenditures, by source of funds:
Projections for 1992, 1995, and 2000
Source 1992
All private funds 46.8
Out-of-pocket 43.7
Private insurance 1.2
Other 1.9
Government funds 53.2
Federal 33.0
State and local 20.3
1995
Percent distribution
46.1
42.9
1.3
1.9
53.9
33.1
20.7
2000
48.6
45.0
1.6
2.0
51.4
31.7
19.7
Source: Sonnefeld, S. T., et al., 1991, Projections of national health expenditures for the year 2000,
Health Care Financing Review 1 3( 1 ): 1-27.
indefinitely. This program serves about
7,600 veterans. By the year 2000, nearly
9 million American veterans will be age
65 or older, up from 7 million in 1990.
Thus, the need for long-term care for
veterans will continue to grow (4).
Funding Projections
The source of funds for nursing home
care is expected to change slightly by
the year 2000 (table 3). According to the
HCFA, the proportion paid by private
sources--<>ut of pocket, insurance, and
other-should increase by almost 2 per­cent,
while that paid by public funds
should decline by a corresponding
proportion (12).
Nursing Home Personnel
Shortage
Because wages for nursing personnel in
nursing home facilities are lower than in
hospitals, there is a continuing shortage
of nurses, aides, and other personnel in
the long-term care industry (fig. 2). In
1991, the average aide wage in hospitals
was 33 percent higher than in nursing
facilities, and the average registered
nurse wage was 14 percent higher.
Wage disparity may be partially attrib­uted
to the source of reimbursement. The
primary source of funds for nursing
facilities is Medicaid, whereas the pri­mary
source for hospitals is Medicare (4).
Care Management
Care management services are becoming
an integral part of long-term care. Also
called case management, case coordina­tion,
service coordination, or service
management, care management arose
out of a need to make the delivery of
health care less complicated for the
increasing number of older Americans
who require long-term care. Care
management is particularly beneficial
for those individuals with chronic, multi­ple
health problems or psychosocial
problems and those without family
or friends nearby (2).
A care manager assesses an individual's
need for long-term care; locates, arranges,
and coordinates the provision of services
from a variety of sources; and monitors
these services. A care manager can also
help a family deal with the fmancial
aspects of long-term care by considering
available options and by determining
eligibility for government programs (2).
Family Economics Review
Care management services are available
from several sources. Under the Older
Americans Act, each State receives Fed­eral
funds for local programs for citi­zens
age 60 and older, allocated by the
Area Agencies on Aging. Information
and referral programs funded by the
Area Agencies on Aging may offer
care management services for elderly
people. State departments of social
services may offer care management
in determining eligibility of long-term
care services under Medicaid. Hospitals
often offer care management when a
patient is to be discharged. Insurance
companies that offer long-term care
insurance may also offer care manage­ment
as part of their coverage. In addi­tion,
there are private geriatric care
agencies and individuals who provide
care management for a fee, usually
ranging from $50-$150 per hour. When
provided under Medicaid or private
insurance, there is usually no out-of­pocket
cost to the consumer. Area
Agencies on Aging may offer free care
management or use a sliding-scale fee
system (2).
Alternatives to Nursing Home
Care
Continuing Care Retirement
Communities
A continuing care retirement community
(CCRC) contracts with an older person
to provide independent living and appro­priate
health services for the rest of that
person's life. Health services include
care management and primary, acute,
and long-term care. CCRC's encourage
independent living in apartments, rooms,
or cottages for as long as possible (1).
Historically, religious organizations
established homes to care for aged and
disabled members; this concept evolved
into CCRC's. Nearly all CCRC's today
are sponsored by religious or other non­profit
organizations, although several
commercial organizations, such as
Marriott, have entered the market (1 1).
Figure 2. Average hourly wages of nursing personnel (per FTE)
in nursing facilities compared to hospitals, 1991
$20.00
$15.00
$10.00
$5.00
D Nursing facility
• Hospital
$7.28
$15.66
$10.31$10.61
LPN
Source: American Health Care Association, 1992, Issue and Data Book for Long Term Care,
Washington, DC (4).
1993 Vol. 6 No. 4
• Between 1990
and 1991, there
was a 34.4-percent
increase in Medicaid
program benefits.
15
•
16
There are over
5 million functionally
disabled elderly
Americans who
continue to live at
home.
Most CCRC's require a substantial entry
fee and ongoing monthly payments,
which vary according to apartment size
and the level of health care included in
the individual's contract. The three
basic levels of health care are:
• Extensive-includes housing,
services, and long-term nursing
care with no substantial increase
in monthly fees;
• Modified-includes housing,
services, and a limited amount of
nursing care, with daily rates for
nursing care thereafter; and
• Fee-for-service-includes housing,
services, and guaranteed access to
long-term nursing care but at full
daily rates (1).
In 1988, the median entrance fee for
a one-bedroom unit with three meals a
day was $47,000, with a monthly fee of
$830. Since 1988, fees have increased
by about 5 percent a year (I 1).
An estimated 1,000 CCRC's were in
operation in 1991, an increase of about
300 since 1988. On average, the facilities
house nearly 300 residents each, serving
about 1 percent of the elderly population
(I 1). CCRC's are regulated in 36 States,
and over 90 percent ofCCRC's are
located in these 36 States. The greatest
number of CCRC' s are located in
Pennsylvania, California, and Florida.
North Carolina, Illinois, Indiana, Ohio,
Kansas, and Texas also have large
numbers of CCRC' s. The average age
of CCRC residents is 82, and the average
age at entry is 78. The majority are
female (77 percent) and single (73
percent) (1).
The major drawback to CCRC' s is their
price. Only an estimated 15 percent of
those age 75 or older in the year 2000
will be able to afford living in a CCRC
(I 1).
Assisted Living Facilities
Another al ternative to nursing home
care is residence in an assisted living
facility (ALF). Nationwide, over 1.5
million elderly and disabled people live
in ALF's, which serve individuals who
cannot live independently; they require
some assistance but not as extensive as
that provided in a nursing home. Resi­dents
of ALF's, with an average age of
85, may need assistance with bathing,
dressing, eating, housekeeping, transpor­tation,
or other daily activities. About
25 elderly people live in a typical ALF.
The facilities are sponsored by religious,
nonprofit, and for-profit organizations
and are generally regarded as cost­efficient
(1). Most States do not license,
inspect, or monitor these facilities, and
costs and quality of care vary greatly (3).
Home Health Care
There are over 5 million functionally dis­abled
elderly Americans who continue
to live at home (9). The majority of the
disabled elderly living at home rely on
informal caregiving from a spouse,
family member, or friend in order to
remain at home. Seventy percent rely
solely on informal, nonpaid assistance,
27 percent use a combination of formal
and informal care, and 3 percent rely
solely on paid caregivers (9). The types
of patients who could benefit from home
health care include those with dementia,
functional dependency, terminal illness,
isolation, complex medical illness,
immobilization, and need for extended
posthospital care (I 0).
The total expenditure on home health
care in the United States in 1990 was
$6.5 billion, up from $1.3 billion in 1980
(12). The tremendous growth in the home
health care industry can be attributed to
the pressure for earlier hospital discharges
based on the diagnosis-related group
(DRG) system, the increasing costs of
nursing home care, and the desire of
most elderly people to remain in their
own home (10).
Family Economics Review
Figure 3. Home health care payments, 1990
Medicaid
(Federal)
17.4%
Medicare 42.0%
7.2%
Other
Medicaid
14·5% (State)
Private
7·2% insurance
11.6% Out-of-pocket
Source: American Health Care Association, 1992, Issue and Data Book for Long Term Care,
Washington, DC (4).
Unlike the payment system for nursing
home care, Medicare is the major source
of funds for home health care, providing
42 percent of payments in 1990 (fig. 3)
(4). Under Part A of Medicare, home
health agency care (HHA) has no time
limitations, copayments, or deductible,
provided the beneficiary is confined at
home and has need for intermittent or
part-time skilled nursing, physical
therapy, or rehabilitation care (16).4
To qualify, there must be a plan of
treatment reviewed periodically by
a doctor (16). Supplemental Medical
Insurance (Medicare Part B), which is
4The home health benefit under Medicare covers
part-time skilled care for up to 35 hours a week (3) .
1993 Vol. 6 No.4
optional and must be paid for through
monthly premiums, will reimburse up
to 80 percent of costs for medical equip­ment,
such as wheelchairs, hospital
beds, and oxygen machines (3).
Other sources of payments for home
health care in 1990 were Medicaid
(32 percent), out of pocket (12 percent),
and private insurance and other (7 per­cent
each) ( 4). The great majority of the
elderly want to avoid the use of nursing
homes if at all possible, and families
tend to place elderly relatives in nursing
homes only after informal caregiving
becomes an overwhelming burden. In
some cases, cost savings and greater
independence can be achieved by using
paid home health care rather than
nursing homes.
Community-Based Services
Community-based services represent
the options available to enable function­ally
dependent people to remain at
home rather than be institutionalized.
Federal funds are allocated by the Area
Agencies on Aging, which provide
services for elderly citizens directly or
under contract with local agencies,
organizations, or companies. Some of
the services are free, whereas others
charge fees. Available services include:
Congregate nutrition sites, home­delivered
meals, chore services, adult
day care, homemaker services, senior
centers, transportation, home visitations,
and telephone reassurance services.
Similar programs are provided for
low-income people under Social
Service Block Grants (3).
Conclusion
Long-term care includes a broad range
of health, social, and personal care
services, many of which may be viable
alternatives to care in a nursing home.
Many services for the elderly are
available at little or no cost. Americans
should recognize that the need for long­term
care is a normal risk of growing
old that can be anticipated and planned
for ahead of time, before there is a
crisis.
17
References
1. American Association of Homes for the Aging. Fact Sheet, May 1992.
2. American Association of Retired Persons. 1992. Care Management: Arranging
for Long Term Care [1992 ed.]. Health Advocacy Services, Program Coordination
and Development Department, Washington, D.C.
3. American Association for Retired Persons. 1992. Making Wise Decisions for
Long-Term Care [1992 ed.]. Health Advocacy Services, Program Coordination and
Development Department, Washington, D.C.
4. American Health Care Association. 1992.1ssue and Data Bookfor Long Term
Care. Washington, D.C.
5. Buchanan, R.J., Madel, R.P., and Persons, D. 1991. Medicaid payment policies
for nursing home care: A national survey. Health Care Financing Review 13(1):55-72.
6. Levit, K.R., et al. 1991. National health expenditures, 1990. Health Care Financing
Review 13(1):29-54.
7. Moses, S.A. 1990. The fallacy of impoverishment. The Gerontologist 30(1):21-25.
8. Quinn, J.B. 1992. Policies for old-age care. Newsweek, April20 issue, p. 61.
9. Rowland, D. and Lyons, B. 1991. The elderly population in need of home care.
In: D. Rowland and B. Lyons, eds. Financing Home Care: Improving Protection for
Disabled Elderly People, pp. 3-26.
10. Rubenstein, L.Z. and Kaiser, F.E. 1991. Functional limitations and home care
requirements. In: D. Rowland and B. Lyons, eds. Financing Home Care:
Improving Protection for Disabled Elderly People, pp. 87-103.
11. Somers, A.R. and Livengood, W.S. 1992. Long term care for the elderly: Major
developments of the last ten years. PRIDE Institute Journal of Long Term Home
Health Care 11(1):6-18.
12. Sonnefeld, S.T., et al. 1991. Projections of national health expenditures through
the year 2000. Health Care Financing Review 13(/): 1-27.
13. U.S. Department of Health and Human Services, Health Care Financing
Administration. 1993. HHS News. January 29 issue.
14. U.S. Department of Health and Human Services, Health Care Financing
Administration. 1992. I992 HCFA Statistics. HCFA Pub. No. 03333.
15. U.S. Department of Labor, Bureau of Labor Statistics. 1992. CPI Detailed
Repon, January 1992.
16. Waid, M.O. 1992. Medicare and Medicaid. Brief Summaries of Title XVIII and
Title XIX of the Social Security Act. Health Care Financing Administration, U.S.
Department of Health and Human Services.
18 Family Economics Review
1993 Vol. 6 No.4
Research Summaries •
Measuring the
Economic Status
of the Elderly
The economic status of older Americans
has been an issue of great concern to
researchers and policymakers. Previous
studies revealed a disparity of findings­some
researchers concluded that the
economic status of the elderly was low,
whereas others found them to be well-off.
This study reports on recent research
and discusses the numerous complexities
involved in making an accurate assess­ment
of elders' economic status. Com­pared
with most other recent studies,
this study finds a less favorable status
for the elderly relative to other age
groups.
Current Research
The elderly are not a homogeneous group,
and wide differences exist within each
subgroup. In 1990, median cash income
of households with a householder age
65 or older was $16,855. Seven percent
of all elderly households had incomes
below $5,000, 8 percent between
$50,000 and $100,000, and 2 percent
had incomes of at least $100,000.
Income also varied by marital status,
race or ethnicity, and age subgroup.
In 1990, median income for married
couples was $23,352, compared with
$10,893 for unmarried males and
$8,746 for unmarried females. Median
income for White household units
(married couple or unmarried people)
was $14,542 versus $6,987 for Black
and $7,879 for Hispanic households.
The youngest older households (65-69
years old) had a median income of
$18,352, more than double that of the
group age 85 and older ($8,668).
In 1990, the poverty rate for the elderly
also varied among subgroups. The over­all
poverty rate was 12.2 percent, 10.1
percent for Whites, 33.8 percent for
Blacks, and 22.5 percent for Hispanics.
Within the group 65 years and over,
poverty rates ranged from a low of 8.4
percent for those age 65-69 to a high of
20.2 percent for those age 85 and older
(table 1). Whereas the poverty rate for
the elderly is below that for the non­elderly
(13.7 percent), it is above the
rate for adults between ages 30 and 64.
Table 1. Percentage of poor
people, by age, 1990
Percentage of age
Age of person group below
poverty threshold
All ages 13.5
Under 65 13.7
65 or older 12.2
Under 5 24.0
5-9 21.3
10- 14 18.7
15- 19 16.4
20-24 15.8
25-29 12.8
30-34 11.4
35-39 9.1
40-44 7.7
45-49 7.3
50-54 8.4
55-59 9.0
60-64 10.3
65-69 8.4
70-74 11.3
75-79 13.3
80- 84 17.5
85 or older 20.2
Source: Tabulations from the March 1991
Current Population Survey.
19
An important resource for the elderly
is their net worth. In 1988, median net
worth for households with a householder
age 65 or older was $73,471. Seventeen
percent had a net worth of less than
$10,000, 26 percent were between
$100,000 and $250,000, and 14 percent
had a net worth over $250,000. Again,
there is great variation in net worth
among subgroups of the aged. Median
net worth was $81,648 for White house­holds,
$22,210 for Blacks, and $40,371
for Hispanics. Married-couple households
had a net worth of $124,419, compared
with $48,883 for unmarried males and
$47,233 for unmarried females.
Median cash income in 1990, adjusted
for unit size and age, was highest for
middle age groups and lowest for the
oldest and youngest age groups (table
2). The median for the group age 85 and
older was $10,220-the lowest of any
age group. Their relative median (that
is, the median for the group divided
by the median for all ages) was 0.53,
compared with that of 0.97 for the
age group 65-69. The highest median
income, $26,305 (relative median 1.37),
was reported by those age 45-49.
Other Recent Research
Some researchers believe that the
well-being of age groups can be better
assessed by including noncash income
together with cash income. The well­being
of the elderly generally improves
relative to that of the nonelderly when
noncash income is included in the
measurement. Medicare benefits have
a large positive impact on the economic
status of the elderly. The inclusion of
imputed rent also improves their status
because a high proportion own their own
homes. However, the types of noncash
income included in the measurement
of economic status and the valuation
of those types of income are highly
controversial.
20
Table 2. Median family unit income, adjusted for unit size and age, and
relative median, by age of unit head, 1990
Age of unit head Median Relative median
All ages1 $19,174 1.00
Under age 65 20,401 1.06
65 or older 14,782 .77
20-24 11,241 .59
25-29 17,588 .92
30-34 19,176 1.00
35-39 20,845 1.09
40-44 22,815 1.19
45-49 26,305 1.37
50-54 25,983 1.36
55-59 24,884 1.30
60-64 20,527 1.07
65-69 18,506 .97
70-74 15,591 .81
75-79 13,476 .70
80-84 11,500 .60
85 or older 10,220 .53
1 Includes units with age of head 15 or older.
Source: Tabulations from the March 1991 Current Population Survey.
The Bureau of the Census published
studies that include noncash income
when comparing the income of the
elderly versus that of all ages. The
estimates were based on Current
Population Survey (CPS) data for 1990.
When income was defined as cash
income before taxes, the ratio of median
income for elderly households to that
for all households was 0.603 (table 3).
When the same definition was used,
minus taxes plus selected noncash in­come
types, the ratio increased to 0.783.
When the definition also included
imputed rent on owner-occupied homes,
the ratio rose to 0.830. The net effect
of these adjustments was to increase the
median income of elderly households
by 36 percent and to decrease the
median income of all households by
1 percent. The use of means rather than
medians produced similar results.
The Congressional Budget Office (CBO)
published studies of income by age
groups using 1989 CPS data. The CBO
used a definition of income that sub­tracted
several types of taxes (Federal
income and payroll taxes) and added
noncash income (the value of food
stamps, school lunches, and government
housing benefits). Unlike the Bureau of
the Census studies, the CBO definition
of income used an adjustment for differ­ential
needs, and excluded Medicare
and imputed rent on owner-occupied
homes. The ratio of mean income for
elderly households to the mean for all
Family Economics Review
Table 3. Median incomes for all households and for elderly households,
1990
Elderly All Ratio of
Definition of income households households elderly to all
1. Cash income before taxes $18,062 $29,943 0.603
2. Definition 1 minus taxes plus
selected noncash income types 21,700 27,720 .783
3. Definition 2 plus imputed rent 24,590 29,615 .830
Source: U.S. Department of Commerce, Bureau oft he Census, 1991, Measuring the effect of benefits
and taxes on income and poverty: 1990, Current Population Reports, Series P-60, No. I 76-RD.
family units was 0.940. When cash
income before taxes was used as the
definition of income, the ratio dropped
to 0.880.
Other studies have included both cash
income and wealth to estimate well­being.
In general, the relative status of
the elderly improved when wealth was
taken into account in defining resources.
However, combining income and
wealth in a single measure is very
controversial.
Several studies undertaken in recent
years compare the economic status of
the elderly relative to the nonelderly
for the United States and several other
industrialized countries, mainly in
Western Europe. Comparisons show
that U.S. elderly are generally at least as
well-off as the elderly in other Western
industrialized countries. However, pov­erty
rates for the elderly are generally
higher in the United States than in the
other countries studied.
The ability to cope with financial risks
is another aspect of estimating economic
well-being. Studies have looked at the
ability of the elderly to deal with unex­pectedly
high inflation and rare large
1993 Vol. 6 No.4
expenses, such as acute health care
expenses and long-term care expenses.
In one study that assessed vulnerability
to inflation, the elderly were found to be
only slightly vulnerable because home
equity, Social Security, Medicare, and
Medicaid-all very important resources
for the elderly-were assumed to be
inflation proof.
Researchers have not yet found a satis­factory
way to produce a single measure
of economic well-being by combining
information on level of living with infor­mation
on vulnerability to economic
risk. Such a measure would be very
useful in assessing the relative well­being
of the elderly.
Source: Radner, D.B., 1992, The economic status
of the aged, Social Security Bulletin 55(3):3-23.
• The Development
and History of the
Poverty Thresholds
The poverty thresholds and the poverty
guidelines are the two versions of the
Federal poverty measure; the poverty
thresholds are the primary versions. The
thresholds are used mainly for statistical
purposes such as estimating the number
of people in poverty and tabulating
them by type of residence, race, and
other social, economic, and demo­graphic
characteristics. The thresholds
are issued by the Bureau of the Census.
The poverty guidelines, however, are
used for administrative purposes such
as determining eligibility for Federal
programs and are issued by the Depart­ment
of Health and Human Services.
Development of the
Poverty Thresholds
The poverty thresholds were developed
by Mollie Orshansky, an economist
working for the Social Security Admini­stration,
in 1963-64. Orshansky's original
purpose was to develop a measure to
assess the relative risks of low economic
status among different demographic
groups of families with children-not
to introduce a new general measure of
poverty.
Orshansky used the food plans prepared
by the Department of Agriculture as a
"generally accepted" standard of ade­quacy
for food. At the time, there were
four food plans prepared by the Depart­ment
of Agriculture: liberal, moderate,
low-cost, and economy. The first three
plans were introduced in 1933 and the
economy plan in 1961.
21
The economy plan was based on the
Agriculture Department's 1955 House­hold
Food Consumption Survey. Two
ets of poverty thresholds were devel­oped:
one was based on the dollar cost
of food in the economy food plan and
the other on the dollar cost of food in
the le s stringent low-cost food plan.
To tran late the cost of food for a family
into minimum costs for all family
requirements, Orshansky (1) deftned
family size and composition prototypes
for which food costs would be computed,
(2) determined the amount of additional
income needed for items other than
food, and (3) related the cash needs of
farm families to those of comparable
nonfarm families.
Because income requirements are
related to the number of people in a
family, food costs were estimated sepa­rately
for nonfarm families varying in
size from two members to seven or
more. Families were further classified
by the head's gender and the number of
related members under age 18. This was
done because of Orshansky' s special in­terest
in the economic status of families
with children. Two-person families
were classified based on the age of the
head (under or over 65). 1
Engel's Law, which states that the
proportion of income allocated to
necessary items and in particular to
food, is an indicator of economic well­being,
2 was used by Orshansky to esti­mate
minimum necessary expenditures
1The resulting lower poverty thresholds for
families with heads age 65 or older reflected the
fact that food plans for elderly families were
lower than those for nonelderly families.
2-rhis law was developed by German Statistician
Ernst Engel (1821-96). A more precise statement
of the law is: "the poorer a family is, the greater is
the proportion of the total outgo which must be
used for food .... The proportion of the outgo used
for food, other things being equal, is the best
measure of the material standard of living of a
population."
22
for all items. She assumed that equiva­lent
levels of well-being were reached
by families (of three or more people)
only when the proportion of income
they required to purchase an adequate
diet was the same.
The Agriculture Department's 1955
Household Food Consumption Survey
was used to determine the proportion of
total income that should be assumed to
be spent for food. The survey found that
food consumed both inside and outside
the home cost about one-third of a
family's average money income after
taxes. The percentage spent on food
was assumed to be the same for families
regardless of income.
Orshansky then applied food costs to
total expenditures by considering a
hypothetical average (middle income)
family, spending one-third of its income
on food, who must cut back on expendi­tures.
She assumed that the family
would be able to cut back its food and
nonfood expenditures at the same rate.
When the family had reached the point
where the food expenditures equaled
the cost of the economy (or low-cost)
food plan for a family of that size, the
family would have reached a point at
which its food expenditures were mini­mal
but adequate, assuming that "the
housewife will be a careful shopper, a
skillful cook, and a good manager who
will prepare all the family's meals at
home." Therefore, because the family's
food expenditures would still be one­third
of its total exr.nditures (for families
of three or more), the poverty thresh­old
for a family of a particular size and
composition was set at three times the
cost of the economy or low-cost food
plan for such a family. The factor of
three by which the food cost plan was
multiplied became known as the
multiplier.
3Different procedures were used to calculate
poverty thresholds for one- and two-person units
to allow for the relatively larger fixed costs that
small family units face.
For unrelated individuals (one-person
units), no multiplier was used to deter­mine
poverty thresholds. Poverty thresh­olds
based on the low-cost food plan
were set at 72 percent of that for two­person
families. The poverty threshold
at the economy level, which is still used
today, was set at 80 percent of the
corresponding threshold for two-person
families. At this level, separate thresh­olds
were developed for male elderly,
male nonelderly, female elderly, and
female nonelderly unrelated individuals.
The procedure for setting both the 72
and 80 percent thresholds was based on
the premise that the lower the income,
the more difficult it would be for one
person to cut expenses, such as housing
and utilities, below the minimum ex­penses
for a couple.
A distinction was made between farm
and nonfarm families for two reasons.
First, the 1955 Household Food Con­sumption
Survey found that 40 percent
of the food consumed by farm families
came from their own farm or garden. In
addition, farm families could count food
as well as housing as part of the farm
operation, thus reducing the amount of
total money income. Because of these
two factors, farm poverty thresholds
were originally set at 60 percent4 of the
corresponding nonfarm thresholds. It is
important to note that the farm/nonfarm
distinction is not the same as a rural/
urban or nonmetropolitan!metropolitan
distinction. Nonfarm poverty thresholds
were applied to the rural nonfarm as
well as the urban population.
At the conclusion of her work, Orshansky
had calculated 248 detailed poverty
thresholds. There were 124 family
households at each of the two cost levels
(economy and low-cost), half for non­farm
families and half for farm families.
4.ynis figure was changed to 70 percent in 1965; to
85 percent in 1969; and to I 00 percent in 1981.
Family Economics Review
The 1969 Revision
In 1968, the Social Security Administra­tion
tentatively decided to adjust the
poverty thresholds by using data from
the 1965 Household Food Consumption
Survey rather than the 1955 survey.
This decision was based on concerns
that prices in general (as measured by
the Consumer Price Index) had been
rising more rapidly than the food prices
that were being used to adjust the pov­erty
thresholds for inflation each year.
U e of the 1965 survey and subsequent
revision of the economy food plan
would have caused thresholds for the
economy plan to be raised 8 percent
and for the low-cost plan, 4 percent.
However, the Social Security Admini­stration
was overruled in its decision
to revise the poverty thresholds, and
an interagency Poverty Level Review
Committee was selected to "develop
concepts and technical information
required to re-evaluate the poverty
thresholds for future use." In addition,
the decision was made that although the
Census Bureau would be responsible
for publishing poverty statistics, no
agency would be given primary respon­sibility
for maintaining the definition of
poverty and conducting research on
related issues.
The Committee decided to base the
annual adjustment in the poverty thresh­olds
on the annual change in the Con­sumer
Price Index. This replaced the
previous adjustment based on the an­nual
change in the per capita cost of
foods in the economy food plan. Non­farm
poverty thresholds for the base
year 1963 were retained and the new
annual-adjustment and farm/nonfarm
provisions were applied to yield revised
poverty thresholds for 1959 and sub­sequent
years. Because of these revi­sions,
poverty statistics dated before
August 1969 are not comparable to
current poverty statistics.
1993 Vol. 6 No.4
In August 1969, a memorandum was
issued directing all Federal Executive
Branch agencies to use the revised­definition
poverty statistics and thresh­olds
for statistical purposes. This action
made the Orshansky thresholds (revised­definition)
the Federal Government's
official statistical poverty thresholds.
The 1970's Studies
In 1973, the Federal Interagency Tech­nical
Committee on Poverty Statistics
conducted a thorough review of Federal
income and poverty statistics. The com­mittee
made several recommendations;
however, no changes were made in the
poverty definition as a result of the
review. In 1974, a second committee,
under the leadership of the Department
of Health, Education, and Welfare,
began a review of the current measure
of poverty and the implications of vari­ous
alternative measurement schemes.
The final report of the committee did
not recommend specific changes to be
made in the current poverty measure.
In 1978, the Consumer Price Index
for All Urban Consumers (CPI-U) was
introduced in addition to the existing
Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W).
Since 1979, the CPI-U has been used
to update the poverty thresholds for
inflation each year.
The 1981 Revision
In 1979, the Justice Department's Task
Force on Sex Discrimination found that
the current poverty thresholds discrimi­nated
against women because the poverty
thresholds for male-headed families
were higher than those for female­headed
families of the same size and
composition. Although the male-headed/
female-headed distinctions had never
been used in setting the poverty guide­lines,
there was concern that use of
separate male and female thresholds
may affect program evaluation. The
Interagency Committee on Income and
Wealth Distribution Statistics investi­gated
and recommended elimination
of the male-headed/female-headed
distinction, as well as elimination of the
farm/nonfarm distinction and changing
the largest family size category to "nine
persons or more" as opposed to the
current "seven persons or more." These
changes were approved in 1981 and
reduced the number of detailed poverty
thresholds to 48.
Subsequent Developments
The debate about poverty measurement
continued during the 1980's. One of
the most controversial proposals would
count government noncash benefits as
income for measuring poverty without
making corresponding changes in the
poverty thresholds. However, the poverty
thresholds were not subjected to com­mittee
review, and no changes were
made in the official poverty definition.
In 1992, at the request of Congress,
the Committee on National Statistics
of the National Academy of Sciences
convened a panel of academic experts
to examine statistical issues involved
in measurement and understanding of
poverty. The panel is not responsible for
setting a new poverty threshold or evalu­ating
specific programs. The panel will
issue a report by summer 1994.
Source: Fisher, G.M., 1992, The development and
history of the poverty thresholds, Social Security
Bulletin 55(4):3-14.
23
•
Work and Family:
Women in Their
Forties
Thi report examines the labor market
participation and marital status of
women in their forties using data from
the National Longitudinal Survey of
Mature Women. The Survey u ed
interviews to track the experiences
of women as they aged from 40 to 49
during the 1967-86 period. All women
were born between 1927 and 1936.
The e data provide an opportunity to
look at labor force participation of
women in their forties over time.
Weeks Worked
Women in this study averaged 289
weeks of work over the 10-year period.
In comparison, an individual working a
"full year" over this period would have
averaged 480-520 weeks of work. One
in four women worked 480 weeks or
more; one in seven did not work at all
during the 10-year period.
White women were much less likely
to have worked full time or for the full
year during their forties than women
from other races. College education was
directly related to the number of weeks
worked during the year. College­educated
women worked more weeks
than women with high school diplomas,
and women with high school diplomas
worked more weeks than women who
had not completed high school.
Labor Force Participation
Labor force participation of women at
age 40 and 49 was also used to measure
labor-force attachment. About 26 per­cent
of women who were in the labor
force at age 40 were out at age 49, and
about 41 percent who were out at age 40
24
Table 1. Labor force participation status of women at age 40 and age
49 during the 1967-86 period
Labor force participation status transition
In at 40 In at 40 Out at 40 Out at 40
Category In at 49 Out at 49 In at 49 Out at 49
Percent
Total 38.3 13.4 19.8 28.5
Race
White
Other
37.3 12.7 21.1 28.9
45.7 18.9 10.1 25.3
Education
Less than high school
High school graduate
Some college
College graduate
Birth year
1927-28
1929-30
1931-32
1933-34
1935-36
32.7
39.7
41.1
45.8
35.5
34.2
38.9
43.4
40.3
20.2
10.8
8.5
10.0
12.5
12.3
13.9
13.5
15.0
13.8 33.3
22.7 26.8
22.8 27.6
21.5 22.7
21.0 31.0
22.2 31.3
19.1 28.1
18.0 25.1
18.3 26.4
Source: U.S. Department of Labor, Bureau of Labor Statistics, /993, Work a'fd Family: Women in Their
Forties, Report 843.
were in at age 49. About two-thirds of
the women were in the same labor force
status at both ages: 38 percent were in
the labor force and 29 percent were out
(table 1). About one-third of the women
changed their labor force participation
status during their forties: 13 percent of
women who were in the labor force at
age 40 were not at age 49, and 20 per­cent
of women who were out at age 40
were in at age 49.
There were significant labor force
participation transitions according to
race. Non-white women were more
likely than white women to be in the
labor force both at age 40 and age 49.
Non-white women were also more
likely than white women to move from
labor force participation status at age 40
to non-participation status at age 49.
In addition, they were much less likely
than white women to move into the
labor force at age 49 if they had not
been in at age 40.
Education also plays a role in the labor
force participation of women during
their forties. Women with a college
education were more likely than women
with high school diplomas or women
who had not completed high school to
be in the labor force both at age 40 and
age 49. Forty-six percent of women
with a college education participated
in the work force at age 40 and 49. In
contrast, one-third of women without
high school diplomas were in the labor
force at both ages. Additionally, one­third
of women without high school
diplomas were out of the labor force
at both ages-which is the highest
proportion of any educational group.
Family Economics Review
Table 2. Marital status of women at age 40 and age 49 during the 1967-86 period
Marital status transition
Married at 40 Married at 40 Single at 40
Category Married at 49 Single at 49 Married at 49
Percent
Total 72.2 10.2 3.9
Race
White 75.7 9.7 3.5
Other 45.9 12.5 7.0
Education
Less than high school 65.3 10.9 4.7
High school graduate 76.8 9.5 3.9
Some college 69.3 12.0 2.9
College graduate 74.4 7.9 2.5
Birth year
1927-28 74.4 10.4 3.5
1929-30 73.4 8.9 3.4
1931-32 71.5 9.7 3.4
1933-34 71.4 11.4 5.5
1935-36 69.9 9.7 3.9
Source: U.S.Department of Labor, Bureau of Labor Statistics, 1993, Work and Family: Women in Their Forties, Report 843.
Marital Status Transitions
The majority (72 percent) of women
were married both at age 40 and age 49.
Fourteen percent were single at both
ages, 10 percent were married at age 40
but single at age 49, and 4 percent were
single at age 40 but married at age 49
(table 2).
There were considerable differences in
marital status transitions by race. White
women were much more likely to be
married than women from other races.
More than three-fourths of white women
were married at ages 40 and 49, com­pared
with less than half of non-white
women. Non-white women were also
more likely to be single at both ages and
to have changed marital status between
age 40 and age 49.
1993 Vol. 6 No.4
Women who were born at later years
were slightly less likely to be married
at both ages than those born in earlier
years. More than 74 percent of women
born in 1927 and 1928 were married at
age 40 and age 49, whereas about 70
percent of women born in 1935 and
1936 were married at both these ages.
Source: U.S. Department of Labor, Bureau of
Labor Statistics, 1993, Work and Family: Women
in Their Forties, Report 843.
Single at40
Single at 49
13.9
11.1
34.6
19.1
9.8
15.8
15.2
11.7
14.3
15.4
11.7
16.5
25
•
Per Capita Food
Spending Trends
Upward
From 1986 to 1990, food spending
in the United States rose 25 percent,
keeping pace with the 25-percent
increase in after-tax household income.
Consequently, the 15-percent share of
after-tax household income allocated
to food did not change.
Spending rose faster for some food
categories than for others, however.
Whereas spending for cereals and bakery
products jumped 34 percent, beef and
pork spending increased 15 and 14
percent, respectively.
Lower income households spent Jess
than wealthier households on most all
food items (table 1). In 1990, the lowest
income households spent $894 per
person on food at home and $440
on food away from borne, while the
wealthiest households spent $1,097 per
person on food at home and $1, 131 on
food away from home.
For all household income groups except
the richest, spending for food at home
increased faster than spending for food
away from home. This was especially
true for the two lowest income groups.
Spending for food at home rose 22 per­cent
faster than spending for food away
from home in the poorest households
and 6 percent faster in the next poorest
group. Conversely, in the richest bouse­holds,
spending on food away from home
grew 39 percent faster than spending for
food at home.
Between 1986 and 1990, after-tax
income for black households rose faster
than for white households, 31 percent
versus 24 percent. Black households
also increased their food purchases at
Table 1. Food spending by income group, 1986 and 1990
1986
Item Poorest Middle Richest
All 20 20 20
percent percent percent
a faster rate, 30 percent compared with
25 percent for white households.
Black households, however, spent
much less per capita on food than did
white households. In 1990, blacks spent
$1,159 per capita and whites spent
$1,775. The fact that white households
ate out more often and earned higher
average incomes ($29,981 versus
$20,599) may partially explain this
difference (table 2).
The increase in food spending varied by
commodity for black and white house­holds.
For example, black households
increased their per capita spending on
fruit and vegetables by 38 percent
between 1986 and 1990, while the
increase for white households was 27
percent. Spending on food away from
home also rose faster for blacks than
whites, 33 percent versus 24 percent.
1990
Poorest Middle Richest
All 20 20 20
percent percent percent
Dollars per person
Food expenditures 1,326 993 1,251 1,829 1,652 1,334 1,484 2,227
Food at home 767 654 753 928 956 894 895 1,097
Cereals and bakery products 106 96 104 129 142 129 130 168
Meat, poultry, fish, and eggs 216 194 212 248 257 261 245 276
Dairy products 97 79 95 115 113 107 112 125
Fruit and vegetables 123 110 118 150 157 151 145 183
Other food at home 213 168 215 266 287 246 264 345
Food away from home 560 338 498 902 697 440 590 1,131
Alcoholic beverages 104 72 104 153 113 71 108 173
Source: Bklylock, J.R. and Smallwood, D.M., 1992, Per capita food spending up 25 percent in 4 years, FoodReview 15(2):7-11.
26 Family Economics Review
Table 2. Food spending by race, 1986 and 1990
1986 1990
Item White Black White Black
Dollars per household
Income before taxes
Income after taxes
26,505 16,964 33,070 22,461
24,094 15,678 29,981 20,599
Average number of
people in household
Food expenditures
Food at home
Cereals and bakery products
Meats, poultry, fish, eggs
Dairy products
Fruit and vegetables
Other food at home
Food away from home
Alcoholic beverages
2.5
1,425
810
112
220
105
130
230
615
115
Number
2.8 2.5 2.7
Dollars per person
893 1,775 1,159
615 1,011 788
83 151 107
234 264 270
57 123 73
98 165 135
140 308 203
278 764 371
46 124 60
Source: Blaylock, J.R. and Smallwood, D.M., 1992, Per capita food spending up 25 percent in 4 years,
FoodReview 15(2):7-11.
Per capita food spending declined as
household size increased. Although
larger households had a much larger
total food bill, household spending
did not increase with household size
because larger households buy more
food in bulk, have more children (who
eat smaller portions), and eat fewer
meals away from home.
1993 Vol. 6 No.4
Urban households spend more per
capita on food than rural households,
$1,728 versus $1,536. This may be
attributed to higher incomes, greater
spending on food away from home, and
lower levels of home food production.
Source: Blaylock, J.R. and Smallwood, D.M.,
1992, Per capita food spending up 25 percent in
4 years, FoodReview 15(2):7- 11.
27
28
Regular Features •
Recent Legislation Affecting Families
Public Law 103-24 (enacted April 23,
1993}-Supplemental Appropriations
provide $4 billion for extended unem­ployment
benefits. These benefits
would have run out by the end of April
1993 for an estimated 1.8 million
Americans. An additional $12 billion
in "economic stimulus," proposed by
the President for a variety of education,
training, and jobs programs and for
projects to improve the Nation's
buildings, roads, and bridges, was
not approved.
Public Law 103-31 (enacted May 20,
1993)-the Voter Registration Act,
known as the "motor voter" law, requires
States to allow citizens to register to
vote when they apply for or renew
driver's licenses or other public certifi­cates.
The law, which will go into effect
in 1995, also requires States to provide
registration through the mail and at
certain State offices that assist the
disabled and distribute welfare checks.
Agencies must inform applicants that
registration is optional and that not
registering will not affect the level of
their benefits. Also, agency employees
cannot pressure applicants into register­ing
for a particular party. States should
be able to add an estimated 49 million
or more people to voter registration
rolls, based on numbers of voting-age
citizens who are not registered to vote
but who have State-issued driver's
licenses or identification cards.
Public Law 103-43 (enacted June 10,
1993)-the National Institutes of Health
Revitalization Act of 1993 provides
3 years of funding for the National
Institutes of Health (NIH). In fiscal
1994, $6.2 billion is designated for the
National Cancer Institute; the National
Heart, Lung and Blood Institute; and
the National Institute on Aging. Of that
amount, $400 million has been author­ized
for research on breast and ovarian
cancers. The law requires NIH to in­clude
significant numbers of women
and minorities in clinical trials of new
medical treatments and establishes a
separate office on women's health
research. The act also codifies the
President's Executive order lifting the
ban on research using fetal tissue from
elective abortions and establishes a
permanent immigration ban on
foreigners infected with HIV, the AIDS
virus. The ban means that foreigners
seeking permanent residence in the
United States are tested for the AIDS
virus and excluded if they test positive.
Family Economics Review
•
Data Sources
1976-1987 National Survey
of Children
Sponsoring agency: Foundation for
Child Development and National
Institute of Mental Health, U.S. Depart­ment
of Health and Human Services
Population covered: Children ages
7-11 in 1976
Sample size: Wave 1-2 301
Wave 2-1,427, Wave 3_.:._1 ,i46
Geographic distribution: Coterminous
United States
National Longitudinal Survey
of Youth (NLSY)
Sponsoring agency: U.S. Department
of Labor
Population covered: Noninstitutional­ized
civilian youth who were ages 14-
21 and military youth who were ages
17-21 as of January 1, 1979.
Sample size: The sample size was
12,686 when the study began in 1979.
The size of the 1992 sample was 9,018.
Originally, civilian Hispanic, Black,
and economically disadvantaged White
youth were oversampled. However,
beginning with the 1991 survey,
economically disadvantaged White
respondents from the supplemental
sample were no longer interviewed.
Geographic distribution: Nationwide
1993 Vol. 6 No.4
Years data collected: Wave 1-1976,
Wave 2-1981, Wave 3-1987
Method of data collection: Personal
and telephone interviews with the child
~nd the p~ent most capable of providing
mformatwn about the child; self­administered
questionnaires were
completed by the child's teacher on
child's academic performance.
Future surveys planned: No
Major variables: Physical, social, and
psychological well-being; education,
work, marital, and child-bearing patterns;
and dating, delinquent, sexual and
contraceptive behavior.
Years data collected: The civilian
sample was interviewed yearly from
1979 to 1992. The military youth were
interviewed yearly from 1979 to 1984.
Since 1984, 201 youth from the military
sample have been randomly selected for
interview each year.
Method of data collection: Personal
interview except for 1987 when inter­views
were conducted by telephone.
Future surveys planned: Ongoing
Major variables: Marital history,
educational status and attainment, current
labor force status, jobs and employer
information, gaps in employment, train­ing,
work experience, military service,
health limitations, fertility, income and
assets, household composition, and
geographic residence. In addition, NLSY
respondents have participated in several
special surveys. In 1986, 1988, 1990,
and 1992, a battery of cognitive,
socioemotional, and physiological
assessments was administered to
children of female NLSY respondents.
Sources for further information
and data:
Data tapes are available from:
Sociometries Corporation
170 State Street, Suite 260
Los Altos, CA 94022-2812
(415) 949-3282
Child Trends, Inc.
2100 M Street, NW, Suite 610
Washington, DC 20037
(202) 223-6288
Sources for further information
and data:
Center for Human Resource
Research
User Services
921 Chatham Lane, Suite 200
Columbus, OH 43221-2418
Phone: (614) 442-7300
Fax: (614) 442-7329
Bitnet: Usersvc@ohsthr
29
30
•
Charts From Federal Data Sources
States with the 10 highest numbers of female-headed
households, 1 1990
1 No husband present, with related children under 18.
Source: U.S. Department of Commerce, Bureau of the Census.
States with the 10 highest percentages of female-headed
households, 1 1990
1No husband present, with related children under 18.
Source: U.S. Department of Commerce, Bureau of the Census.
Family Economics Review
States with the 10 highest numbers of female-headed
households1 in poverty, 1990
1 No husband present, with related children under 18.
Source: U.S. Department of Commerce, Bureau of the Census.
States with the 10 highest percentages of female-headed
households in poverty,1 1990
1
No husband present, with related children under 18.
Source: U.S. Department of Commerce, Bureau of the Census.
1993 Vol. 6 No. 4 31
•
Journal Abstracts and Book Summary
The following abstracts are reprinted verbatim as they appear in the cited source.
Moss, M.S., Lawton, M.P., Kleban,
M.H., and Duhamel, L. 1993. Time
use of caregivers of impaired elders
before and after institutionalization.
Journal of Gerontology: Social
Sciences 48(3):S102-S111.
Time use was examined by means of
time budgets obtained from 165 care­givers
of older persons recruited from
nursing home waiting lists and state
nursing home assessment programs.
"Yesterday interviews" were done at
baseline (Tl) and, again, an average of
5 months later when the elder had either
entered a nursing home (n = 77) or was
still awaiting entry (n = 88). Caregivers
who provided more help (particularly
instrumental assistance) to their elder
were more likely to see that person
placed in a nursing home at follow-up.
More caregiving time was reported by
those living with the elderly person
and by nonworking and lower income
caregivers; the elders being cared for by
these groups were also more impaired.
Less caregiving time (a total gain of
1 hour 47 minutes) was reported by
caregivers following admission of the
older person to the nursing home. The
gained time was allocated to a signifi­cant
degree to family interaction,
recreation, and time outside the home.
Oropesa, R.S. 1993. Female labor
force participation and time-saving
household technology: A case study
of the microwave from 1978 to 1989.
Journal of Consumer Research
19(4):567-579.
American households are facing severe
time constraints as women increase
their participation in the wage economy.
The implications of this situation for
the adoption of time-saving technology
in the home are not well understood.
32
Previous research suggests several
scenarios regarding the consequences
of female labor force participation for
the purchase of time-saving technology:
(1) there may be no effect, (2) female
labor force participation may have a
direct effect, (3) female labor force
participation may have an indirect
effect through income, or ( 4) direct
effects emerge over time. This article
evaluates these hypotheses with a case
study of the microwave oven, through
proprietary cross-sectional surveys of
married-couple households conducted
from 1978 to 1989.
Purnell, M. and Bagby, B.H.1993.
Grandparents' rights: Implications
for family specialists. Family
Relations 42(2):173-178.
Recently every state in the U.S. has
passed laws giving grandparents the
right to petition the courts for the privi­lege
of visiting their grandchildren.
Family specialists need to understand
the nature of grandparents' rights laws
because these laws affect their duties.
Research findings and expert witness
testimonies of family specialists should
be included in court proceedings
determining children's best interests.
Such findings can influence future use
of and amendments to grandparents'
rights laws.
Boss, P.G., Doherty, WJ., LaRossa,
R., Schumm, W.R., and Steinmetz,
S.K., editors. 1993. Sourcebook of
Family Theories and Methods: A
Comextual Approach. Plenum Press,
New York.
The development of family theory is
presented-from its beginnings in
religion and philosophy, through the
theory construction and methodology
of the mid-20th century, to the
newly emerging models of the late
20th century. Each theory and method
is placed in the sociohistorical con­text
that influenced its formulation.
Some personal or biographical infor­mation
is included on the various
theorists and methodologists. The
emphasis, however, is on family
theories and research methods-and
the relationship between the two.
Methods chapters illustrate how
methods interact with family theories
(and vice versa), and theory chapters
describe research methods that are
most often identified with that theory.
The Sourcebook's 27 chapters are
divided into 7 parts, organized to
reflect the emergence of different
family theories and methods during
the 20th century. Many chapters
have a separate application section
where authors discuss the implica­tions
of the theories for helping
today's families cope with problems
and enhance the quality of their
lives. Authors of theory chapters
explain how the theories accommo­date
differences in age, ethnicity,
race, and gender. There are 73 con­tributing
authors, including family
therapists, family life educators,
policy experts, social workers, and
health care professionals.
Family Economics Review
• Cost of Food at Home
Cost of food at home estimated for food plans at four cost levels, August 1993, U.S. average1
Cost for 1 week Cost for 1 month
Sex-age group Thrifty Low-cost Moderate- Liberal Thrifty Low-cost Moderate- Liberal
plan plan cost plan plan plan plan cost plan plan
FAMILIES
Family of 2:2
20 - 50 years .............•..• . . $50.60 $63.70 $78.40 $97.20 $219.30 $276.10 $339.50 $421.30
51 years and over ......... . .. . .. 47.90 61 .20 75.10 89.90 207.60 264.90 325.60 389.20
Family of 4:
Couple, 20- 50 years
and children-
1 - 2 and 3 - 5 years ........... . 73.80 91.90 112.10 137.40 320.10 398.30 485.40 595.50
6 - 8 and 9 - 11 years ........... 84.60 108.00 134.80 162.00 366.40 468.10 584.00 702.20
INDIVIDUALS3
Child:
1 - 2 years .................... . 13.40 16.30 19.00 22.90 58.20 70.50 82.30 99.40
3-5 years . . ............ . .. . ... 14.40 17.70 21 .80 26.10 62.50 76.80 94.50 113.10
6-8 years .... .. .. . ............ 17.60 23.40 29.30 34.10 76.20 101.60 127.10 147.90
9- 11 years ......... . .... ..•. .. 21 .00 26.70 34.20 39.50 90.80 115.50 148.30 171.30
Male:
12- 14 years ...... .. ........ . .. 21.70 30.20 37.60 44.20 94.20 130.90 163.00 191.40
15 - 19 years ................... 22.60 31 .20 38.70 44.90 97.90 135.20 167.90 194.50
20 - 50 years ... .. . . ... .. ......• 24.20 30.90 38.50 46.50 104.80 133.80 166.60 201 .60
51 years and over .....•... . .• .. . 21 .90 29.30 36.00 43.10 95.10 126.90 155.90 186.60
Female:
12 - 19 years ... . ..... . .. . .. . .. . 22.00 26.10 31.60 38.20 95.10 113.10 137.10 165.50
20 - 50 years ... . .....•..•..•... 21 .80 27.00 32.80 41.90 94.60 117.20 142.00 181 .40
51 years and over ............... 21.60 26.30 32.30 38.60 93.60 113.90 140.10 167.20
1 Assumes that food for all meals and snacks is purchased at the store and prepared at home. Estimates for the thrifty food plan were
computed from quantities of foods published in Family Economics Review 1984( 1). Estimates for the other plans were computed from
quantities of foods published in Family Economics Review 1983(2). The costs of the food plans are estimated by updating prices paid by
households surveyed in 1977-78 in USDA's Nationwide Food Consumption Survey. USDA updates these survey prices using information
from the Bureau of Labor Statistics, CPI Detailed Report, table 4, to estimate the costs for the food plans.
2Ten percent added for family size adjustment. See footnote 3.
3rhe costs given are for individuals in 4-person families. For individuals in other size families, the following adjustments are suggested:
1-person-add 20 percent; 2-person-add 10 percent; 3-person-add 5 percent; 5- or 6-person-subtract 5 percent; 7- or more-person-subtract
1 0 percent.
1993 Vol. 6 No. 4 33
•
Consumer Prices
Consumer Price Index for all urban consumers (1982-84 = 1 00]
Group
All items ....... . ............... . .. . ...... . ...... .
Food .... . ............. .. . . ........ . .......... .
Food at home ............... .. ..... ..... ..... .
Food away from home .. . .............. . . ...... .
Housing . . . .. .... .. . ... . . .... ............•. ....
Shelter . ..... . ....... ......... .. .. ... ..... ... .
Renters' costs 1
.......... . .. .. . ...... ... ..... .
Homeowners' costs 1
........................•.
Household insurance 1
....•... ..... • ........ .
Maintenance and repairs .. .. .... . ......... . . . . .
Maintenance and repair services ..... . ........ .
Maintenance and repair commodities .......... .
Fuel and other utilities . . ................ . ... .. .. .
Fuel oil and other household fuel commodities ..... .
Gas (piped) and electricity ..................... .
Household furnishings and operation . ......... .. .. .
Housefumishings ............................ .
Housekeeping supplies ....... .. . ........ .. .. . .
Housekeeping services ... .. ................ .. .
Apparel and upkeep ........ . ....... . ............ .
Apparel commodities .......................... .
Men's and boys' apparel . .............. . ...... .
Women's and girls' apparel .. ...... .. . .. ....... .
Infants' and toddlers' apparel. . . .... ... ........ . .
Footwear ....... . ........... . .............. .
Apparel services . ... .... ... .. . .. .......... . ... .
Transportation ........... . .. ..... ...... .. .. . ... .
Private transportation .......................... .
New vehicles ... .. .. ...... ...... . .......... . .
Used cars ... . ...... . ....................... .
Motor fuel. ...... .. ............ ...... ....... .
Automobile maintenance and repair ............. .
Other private transportation .. .. .. . . ............ .
Other private transportation commodities . . ..... .
Other private transportation services . .... .. .... .
Public transportation ..... . ....... .... . .. ....... .
Medical care ....... .... .......... ...... ........ .
Medical care commodities ........ . ..... .. ...... .
Medical care services ............ . .... ..... .. . . .
Professional medical services .... . ... ....... ... .
Entertainment ........... .. . ... ...... . ..... . .. . . .
Entertainment commodities ........... . . . ... . ... .
Entertainment services ........ . .. . ......... .... .
Other goods and services .............. .. .. . .. ... . .
Personal care ....................... . . ....... .
Toilet goods and personal care appliances ........ .
Personal care services ........................ .
Personal and educational expenses ............... .
School books and supplies ... . .. ... ....... . . .. .
Personal and educational services ...... ..... .. . .
11ndexes on a December 1982 = 1 00 base.
Source: U.S. Department of Labor, Bureau of Labor Statistics.
34
August
1993
144.8
140.8
139.7
143.6
142.3
156.8
167.3
160.8
148.0
131.6
136.5
124.9
123.3
87.8
122.2
119.2
109.5
129.2
136.5
131.9
129.0
126.0
130.0
128.4
123.5
152.0
130.2
127.3
132.2
137.5
97.0
146.2
156.4
102.7
168.7
168.1
202.9
196.1
204.5
185.9
145.8
133.3
160.9
193.4
142.0
139.8
144.3
211.6
199.9
212.7
Unadjusted indexes
June July
1993 1993
144.4
140.4
139.3
143.2
141 .5
155.7
165.2
160.1
146.6
131 .2
136.0
124.8
122.9
90.4
122.0
119.1
109.1
131.3
135.6
131 .9
129.1
126.5
129.1
128.1
125.6
151 .3
130.3
127.6
132.2
134.3
99.8
145.8
155.8
102.9
167.9
164.5
201.1
194.7
202.6
184.8
145.5
133.2
160.4
193.1
141 .1
139.0
143.3
208.3
196.4
209.4
144.4
140.3
139.1
143.4
141.9
156.3
166.8
160.3
147.4
131.3
136.2
124.7
123.2
89.1
122.2
118.8
109.0
129.7
135.8
129.4
126.4
124.9
125.0
126.7
123.9
151.7
130.3
127.4
132.2
136.1
98.1
146.2
156.0
102.9
168.2
167.7
202.2
195.7
203.8
185.4
145.3
133.1
160.2
193.7
142.0
140.0
144.0
209.1
196.4
210.2
August
1992
140.9
138.0
136.9
141 .0
138.6
152.3
163.5
155.8
142.9
128.1
133.1
121.3
119.4
89.7
117.5
118.3
109.0
130.1
133.0
130.2
127.6
124.1
127.5
128.8
124.9
148.6
126.9
125.4
128.5
126.4
101.7
141.6
153.1
104.6
164.1
146.7
191.5
188.9
192.2
177.1
142.6
131.6
156.2
183.9
138.7
137.3
140.1
197.7
189.7
198.6
Family Economics Review
• The Family Economics Research Group and the Family Economics Review
gratefully acknowledge the reviewers of manuscripts for 1993 issues.
Amelia E. Adams
Norfolk State University
AmaraBachu
Bureau of the Census
U.S. Department of Commerce
Cathy F. Bowen
The Pennsylvania State University
Raedene Combs
University of Nebraska
BrendaCude
University of illinois
David J. Eggebeen
The Pennsylvania State University
Karen Fox Folk
University of Illinois
Marilyn M. Furry
The Pennsylvania State University
Lillie B. Glover
South Carolina State University
Karen Goebel
University of Wisconsin-Madison
Dorothy A. Goss
Oklahoma State University
Sherman Hanna
The Ohio State University
Sandra Helmick
Oregon State University
Donald Hernandez
Bureau of the Census
U.S. Department of Commerce
Tahira Hira
Iowa State University
Pamela Hitschler
Bureau of Labor Statistics
U.S. Department of Labor
Charles A. Luckett
Federal Reserve Board
W. J. McAuley
Virginia Polytechnic Institute and State University
Carolyn McKinney
The Ohio State University
Mary Naifeh
Bureau of the Census
U.S. Department of Commerce
Barbara O'Neill
Rutgers University
Kathleen Parrott
Virginia Polytechnic Institute and State University
Geoffrey Paulin
Bureau of Labor Statistics
U.S. Department of Labor
Elizabeth M. Reise
Bureau of Labor Statistics
U.S. Department of Commerce
Barbara R. Rowe
Purdue University
Marilyn Cross Shinn
University ofldaho
Marlene Sturn
University of Minnesota
1993 Vol. 6 No.4 35
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Family Economics Review
·--· - -
•
Index of Articles in 1993 Issues
Economic Status
*Change in the Economic Status of America's Elderly Population During the Last 50 Years
Extended Measure of Well-Being
*Families With Children: Changes in Economic Status and Expenditures on Children Over Time
*Loan Between Baby-Boomer Householders and People in Other Households
Measuring the Economic Status of the Elderly
The Development and History of the Poverty Thresholds
Expenditures
Consumer Spending in the 1980's
*Expenditures of Younger and Older Baby Boomers
*Hou ing Expenditures of the Elderly: Owners and Renters
Food
Food Spending by Female-Headed Households
Fruit and Vegetable Consumption
Per Capita Food Spending Trends Upward
Health Care
A Profile of ursing Home U ers Under Age 65
Economic Implications of Ri sing Health Care Costs
*Long-Term Care Trends
Private Health Insurance Premiums in 1987: Policyholders Under Age 65
Projections of National Health Expenditures
Work
Training To Qualify for Jobs and Improve Skills
U.S. Workers Receive a Wide Range of Employee Benefits
Work and Fami ly: Women in Their Forties
Other
*Child-Care Trends
Developments in the Pricing of Credit Card Services
*Family Economics Review: 1943-93
Residents of Farms and Rural Areas: 1990
Saving and Demographics: Some International Comparisons
*Trend in Consumer Credit
*Indicates an original article.
1993 Vol. 6 No. 4
Issue No.
I
4
4
4
I
2
3
I
2
4
3
3
4
3
3
2
2
4
2
2
3
Page No.
18
37
9
2
19
21
30
2
2
32
24
26
18
21
9
24
26
17
20
24
8
34
2
28
22
8
37
Highlights
Baby-Boomer Loans