Economic Report President

whether minorities and women are likely to be better off relative towhite men in DB or DC pension plans.ConsumptionThe economic status of the elderly is ultimately measured by thestandard of living that they enjoy. Elderly households typically spendless on consumption than younger households (Table 4-3), in partbecause the average elderly household has fewer people. But the threelargest expenditure categories for elderly households are the same asthose for younger ones, namely, housing, transportation, and food. Asis well known, health care accounts for a greater share of expenditurefor elderly households than for younger ones: 11.7 percent versus 4.2percent.TABLE 4-3.—Consumption Patterns of Elderly and Nonelderly Householdsby Age of Household Head, 1997Percent of total expendituresItemAllhouseholdsHeadunder 65Head65 and overHousing ..................................................................................... 32.4 32.3 33.1Transportation ........................................................................... 18.5 19.0 15.6Food..................................................................................................... 13.8 13.7 14.3Personal insurance and pensions....................................................... 9.3 10.2 3.9Health care ................................................................................ 5.3 4.2 11.7Entertainment ............................................................................ 5.2 5.3 4.5Apparel and services .................................................................. 5.0 5.1 4.3Cash contributions.............................................................................. 2.9 2.4 5.4Miscellaneous ............................................................................ 2.4 2.4 2.5Education ................................................................................... 1.6 1.8 .6Personal care products and services.................................................. 1.5 1.5 1.8Alcoholic beverages ............................................................................ .9 .9 .8Tobacco and smoking ................................................................. .8 .8 .6Reading............................................................................................... .5 .4 .7AVERAGE DOLLAR EXPENDITURES...................................................... $34,819 $37,543 $24,413Source: Department of Labor (Bureau of Labor Statistics).POVERTYThe reductions in poverty among the elderly in recent decades havebeen remarkable: in 1970, 25 percent of all persons over 65 were livingin poverty, but in 1997 only 11 percent were poor (Chart 4-12). Much ofthis improvement occurred in the early 1970s, in part because of double-digitpercentage increases in Social Security benefits enacted in1971, 1972, and 1973. But progress has been made since then as well:elderly poverty has fallen by 28 percent in the last 15 years alone, andsince 1993 it has declined by 14 percent.Many elderly people, however, live just above or just below thepoverty line; relatively small changes in their income could move them163