The Baby Boom as it Ages: How Has it Affected Patterns of Consumption and Savings in the United States

Abstract

Using detailed estimates of personal consumption expenditures at the state level for 1900, 1929, 1970, 1977, and 1982 developed by Stanley Lebergott, this paper demonstrates that the passage of the Baby Boom from childhood through the teen years and into family formation would have caused marked swings in patterns of aggregate consumption and savings in the United States during the past 50 years. The effect of age structure on personal consumption expenditures is estimated using population by single year of age from 0 to 85, revealing the expected pattern of life cycle consumption and savings in the adult years. In addition, however, a strong age-related pattern of consumption expenditures for children is demonstrated, with a strong savings component. The pattern, which emerges for children in all periods, is strongly U-shaped, with the highest levels of expenditure in the earliest years and for teens, and a marked pattern of saving when children are aged about 5 through 12.