SUMMARY
The United States spends 2.4 times as much on the elderly as on children, measured on a per capita basis, with the ratio rising to 7 to 1 if looking just at the federal budget. The tilt toward the elderly is stronger in the United States than in many other countries, although all OECD countries spend more, per capita, on the elderly than on children. Viewed from a life-cycle perspective, it is not unfair to spend more on the elderly than on children because all individuals progress from being children to working-age adults to elderly adults. However, our current system of public expenditures is unfair to younger generations, defined as birth cohorts rather than age groups: the vast and growing size of unfunded health and retirement benefits will require today’s children to bear a heavy tax burden when they grow up to be working-age adults. For our children’s sake, we should restrain growth in elderly benefits and pay our share of taxes.
This is drawn from a series of three working papers on spending on children and the elderly.
- The first, How Much Do We Spend on Children and the Elderly?, is descriptive in nature and provides estimates of public spending on children and the elderly, as well as information on private support for these two age groups.
- The second, A Comparative Perspective on Public Spending on Children investigates whether the United States invests less in children than other rich countries and whether there is a common cross-national pattern of spending more on elderly than on children.
- The third paper, Public Spending on Children and the Elderly from a Life-Cycle Perspective, tackles a challenging question raised by the observed spending patterns in the earlier papers, namely: does it make sense for our country to be spending so much less on children than on the elderly? While such a question sometimes raises issues of intergenerational warfare, the paper addresses it through a life-cycle framework.
The issue brief summarizes the three papers, which provide further detail and references for the information.
The author of the series, Julia B. Isaacs, is the Child and Family Policy Fellow at the Brookings Institution. The papers benefited from the excellent research assistance of Emily Monea and the helpful comments of Isabel Sawhill and Ron Haskins.