Text I. The Household

The population of the United States is aging rapidly. Currently, more than 12 percent of the population is retired—living off pensions, savings, and social security. By the year 2030, 21 percent of the population will be older than sixty-five. The aging of the population is likely to have a dramatic effect on living standards, For instance, the types of goods and services produced will increasingly be influenced by the elderly. In particular, expenditures on health care will continue to rise. Already, people in the United States allocate more than 14 percent of their income to medical care, Is there a limit to how much they are willing to commit? The aging of the population also means that an increasing percentage of people will be retired and a smaller percentage will be producing goods and services and paying taxes. What are the implications for social security and for productivity? Why is the population aging? It is a combination of factors: the birthrate has declined and people are living longer than they used to. Why has the birthrate fallen?

The average size of the nearly 90 million households in the United States is 2.66 persons. Approximately 63 percent of the population is married, 22 percent single, 7 percent widowed, and 8, percent divorced. Only 28 percent of all households have one income earner, 42 percent have two income earners, and the remaining 30 percent may have none or as many as six income earners. In 2005 there were nearly 2.4 million marriages, involving 9.1 percent of the population. This rate has declined since 1990 and people arc now marrying at an older age. In 1990 the median age of males marrying for the first time was 22.5; of females, 20,6. In 2005 the median age of males marrying for the first time was 25.5; of females, 23.7, Divorce is increasing in frequency. In 1965 the divorce rate was 2.3 percent of the total population. In 2005 it was 5.0 percent. The number of children per family is declining. It is currently less than 1 per household for middle-income households and jus over one for all households.

In some societies, households consider children as a resource, labor. In others, a child is the only source of pension benefits for the elderly. The extended
family—children, parents, and grandparents living together under one roof—is a means of providing retirement benefits for the elderly. In the developed nations of the West, however, children are neither a source of retirement benefits nor a source of labor; they are a source of utility.

The baby's first smile and first step are things of joy to a parent. Like a painting that hangs on the wall, a child provides continual enjoyment. Children are demanded because of the benefits they embody. The demand curve for children slopes down, as shown in Figure 1, indicating that a decrease in the relative "price" of children (an increase in benefits per child) increases the quantify demanded.

Supply reflects the marginal cost of each child, The marginal cost of a child includes the cost of the goods and services consumed by the child and the household work provided by family members because of the child. One child increases daily household work by a spouse not employed outside the home by 3 hours, two children by 5 hours, and three by 5.5 hours. Because the opportunity cost of time differs among households, the cost of rearing children differs as well.

The marginal cost of a child may decline for the first few children before it starts to rise. The first child requires baby clothes, cribs, strollers, car seats, and other resources, including the time required to develop child-care skills. Once these items have been obtained for the first child, they may be available at very little extra cost for the second, third, and so on. The second child can wear "hand-me-downs," sleep in the same crib, ride in the same stroller, and use the same car seat as the first.

The greatest cost of children may be the opportunity cost of the time required for their care, but the marginal cost appears to decline because of economies of scale as the number of children increases. Looking after two children may not require twice as much time as looking after one. Cooking for two children may not take any more time than cooking for one. At some point, the older child (children) can assist in caring for the younger child (children). Of course, the age gap between children is an important determinant of the marginal costs of each child. If the gap is too small, the older child cannot help with the younger. If the gap

is too wide, many hand-me-downs will not be useful. There is some age difference between children that is optimal in the sense that costs are minimized.

The number of children a household has is determined by the demand for and supply of children. Impacts on this market, such as religious influences or the different requirements of living in an agrarian society versus those of an urbanized society, are reflected in shifts in the demand for or supply of children. The Second World War had a major impact on the market. By separating men and women, the war virtually destroyed the child market—there was no demand. At the conclusion of the war, there was a pent-up demand for children, and a record number were born between 1946 and 1961. The demand for children that had shifted in from 1940 to 1945 shifted out with a vengeance in 1946. However, once the marginal cost of another child exceeded the marginal benefits of another child, couples quit producing children. Because so many children were produced between 1946 and 1961, there was less demand for additional children after 1961. As a result, a large number of children were produced between 1946 and 1961 but relatively few in the years before and after. This increase in the birthrate is known as a baby boom, and the name given to the population born between 1946 and 1961 is baby boomers. The baby boom generation is contributing to the aging of the U.S. population. The baby boomers, who are now in their forties and fifties, constitute half of the adult U.S. population. The baby boom, however, is not the only reason for the aging of the population. A contributing factor is that the number of children being produced has declined. Although the marriage rate has declined only slightly since the mid-1950s, marriage is changing. Divorce is more prevalent, about double the rate of thirty years ago, and middle- and upper-income families are having fewer children. The primary reason for these developments is the revolutionary change that has laken place in the work force in the last twenty years. More women work outside the home. More than one-third of the new lawyers, physicians, and doctoral-degree recipients are women—up from 1 in 16 twenty years ago. The American family pictured in television shows like

"Leave It to Beaver" and "Father Knows Best" comprised four or live people, only one of whom worked outside of the home. Dad went off to his job every morning while Mom and the kids stayed at home. This family was never as common as it was made out to be; even in the 3950s and 1960s, about one-fourth of wives with children-held jobs outside of the home. Nevertheless, Mom did have the major responsibilities of caring for the children and homemaking. Within the traditional marriage, specialization has historically meant that the male entered the marketplace and the female remained at home, In the past decade, however, more numbers entered the labor force. As a result, children have become more costiy; many women have to leave the labor market during pregnancy, at childbirth, or when their children are young. Having a child became more costly because the opportunity costs of disrupting careers rose for those women in the labor force. As a result of the higher costs, women are delaying having children, which necessarily means fewer children. Later childbirth, combined with the large baby boom population, means a steadily aging population. In addition to the baby boom generation and developments in marriage, the length of lifetimes has risen and thus contributed to the aging of the population, In 1930, those who reached age 65 could expect to live to age 75. By 2005, someone age 65 could expect to live to age 82.

Exercises

/. Learn the pronunciation:

Allocate, median, embody, spouse, rear, crib, stroller, determinant, vengeance, constitute, quit, prevalent recipient, pregnancy.

//. Explain the meaning of the following words and word combinations: Household, to be retired, birthrate, the median age, the marginal cost, to consume, a spouse, rearing children, cribs, strollers, "hand-me-downs", the age gap, determinant, a pent-up demand, to quit, a baby boom, to hold jobs, the length of lifetimes.

///. Learn the vocabulary:

Population; to age; to live off pensions, savings and social security; to be likely to have; living standards; to be influenced by the elderly; expenditures on health care; to allocate; implications for social security and for productivity; approximately; to be widowed; to be divorced; income earners; to involve; frequency; middle-income households; a source of utility; to embody; a spouse; economies of scale; to be reflected in shifts; virtually; to shift out with a vengeance; to quit producing children, to comprise; homemaking; disrupting careers.

IV. Find antonyms to the folio-wing words:

The elderly, to decline, divorce, male, agrarian, pent-up, disrupting.

V. Translate into Russian:

1. The United States is not the only country whose population is

growing older. Most of the developed nations in the world are

experiencing the same aging of their populations.

2. The elderly population constituted about 12 percent in the United

States in 1985 but nearly 17 percent in Sweden.

3. Although three-quarters of the world's population resides in

developing areas, these areas contain only about 50 percent of the

world's elderly.

4. The developed countries are aging because the birthrates in these

countries have decreased and life expectancy has increased.

5. Japan's life expectancy of 77 years is the highest among the major

countries, but most developed nations approach 75 years.

6. In contrast, Bangladesh and some African nations south of the Sahara

have life expectancies of 49 years.

7. As longevity has increased and families have had fewer children, the

ratio of persons 65 and older to persons age 20 to 64 has risen in most

of the developed countries.

8. These elderly support ratios will rise modestly over the next fifteen

years because the large number, of people born between 1946 and

1961 will still be in the labor force,

9. But as the large working-age population begins to retire after 2005,

the elderly support ratio will rise sharply.

VI. Answer the following questions:

1. Why is the U.S. population aging?

2. What does it mean to say that there is a market for children?

3. What are the main impacts on this market?

4. What can you say about the demand for children during the Second

World War?

5. Describe the situation with the child market in the USA after war.

6. What are the changes in marriage in the last twenty years?

7. Do the male and female responsibilities of caring for the children and

homemaking differ? In what way?

8. What is one of the possible ways to rise the length of lifetime?

Vll Discuss the following topics and compare the discussed problems with similar problems in Russia:

1. The number of children a family has depends on the benefits a child

produces and on the costs of a child.

2. World War II had a major impact on the supply of children - a large

number were born in the postwar years.

3. Because it has become increasingly costly for women to have

children during the prime years of human - capital acquisition, the

decision to have a child has been delayed. This delay, combined with

the increased costs imposed on a woman who has a child, has meant a

smaller number of children.

4. The aging of the population is due to the aging of the baby boom

generation, the decreased birthrates, and the increased life

expectancies,

VIII. Read and render the text.

Date: 2016-01-03; view: 651