E C O N O M I C R E P O R T O F T H E P R E S I D E N T

consumption patterns have changed, resulting perhaps in a perception ofincreased consumption needs. In 1950 about 30 percent of a typical family’sexpenditures were for food, and about 10 percent were for clothing. By 1997those percentages had fallen to 14 percent and 5 percent, respectively. Butother expenses have taken up the slack. The typical family now spends agreater share of its income on housing than in the past, and entirely newforms of consumption have become standard. Today, about 90 percent ofhouseholds have automobiles, up from 59 percent in 1950, and the typicalfamily has two motor vehicles and two television sets. Consumers have hadthe discretionary income to buy such goods as CD players, videocassetterecorders, and personal computers. It is estimated that, in 1997, 35 percentof households owned a personal computer, 61 percent had a cordless phone,and 88 percent had a video recorder. Some of these goods that might oncehave been thought luxuries have become increasingly difficult for a family todo without. For example, to the extent that newly created jobs are in thesuburbs rather than the inner cities, a car becomes a near necessity. Andchildren who lack access to a computer at home may suffer an increasingeducational disadvantage compared with their peers who have computers.Meanwhile the same health and demographic trends that have increasedlongevity also confront many more families with the need to care for theirelderly relatives. Although the elderly at any particular age are healthiertoday than in the past, they are likely to require more care over more years, inpart because they are living longer and because medical advances can keepthe very ill alive longer than before. This care often becomes the responsibilityof their adult offspring.Consumption of formal and informal care by the elderly has increasedsubstantially. From 1987 to 1996 the number of nursing homes increased 20percent, and the use of home and community-based care is growing rapidly.The population receiving such care is becoming older and increasingly frail.The proportion of nursing home residents over age 85 increased from 44percent in 1987 to 49 percent in 1996, and that of residents with limitationsin three or more standard activities of daily living (a common measure offrailty) rose from 72 percent to 83 percent over that period. The average costof a nursing home is now more than $40,000 per year, and for thoseadmitted to a nursing home at age 65 or older, the average length of stay is29 months for women and 23 months for men. Nearly 50 percent of thecosts of long-term care are paid out of pocket by nursing home patients andtheir families, and Medicaid bears most of the remaining costs. The implicationsfor family time of increased care for elderly relatives are discussed in thenext section.184 | Economic Report of the President