Consumption Patterns around the Time of Retirement: Evidence from the Consumer Expenditure Surveys
AbstractThis study,using the Consumer Expenditure Surveys from 1984 through 1998, revisits the widely pronounced retirement-savings puzzle, which claims the existence of a sharp drop in consumption at the time of retirement. In contrast to previous work, I find that consumption of the retired households is consistent with the smoothing behavior implied by the conventional permanent income/life-cycle models. The results present evidence that the elderly actually do not reduce their standard of living around the time of retirement due to a shortage in savings or some other reasons. While the evidence does not favor a dramatic drop in consumption, the composition of consumption changes significantly as households move into the retirement period. The difference between the results of this study and those of the previous work is mainly driven by the fact that I use a comprehensive measure of consumption that includes not only nondurables and services but also service flows from housing and durables. Moreover, using detailed information on the prices faced by the households yields a more accurate measure of household consumption
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 54.
Date of creation: 11 Aug 2004
Date of revision:
Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
Consumption; Well-being of the Elderly; Retirement;
Find related papers by JEL classification:
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
- NEP-BEC-2004-10-30 (Business Economics)
- NEP-DGE-2004-10-30 (Dynamic General Equilibrium)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James Banks & Richard Blundell & Sarah Tanner, 1995.
"Is there a retirement-savings puzzle?,"
IFS Working Papers
W95/04, Institute for Fiscal Studies.
- Orazio P. Attanasio & James Banks & Costas Meghir & Guglielmo Weber, 1995.
"Humps and Bumps in Lifetime Consumption,"
NBER Working Papers
5350, National Bureau of Economic Research, Inc.
- Orazio Attanasio & James Banks & Costas Meghir & Guglielmo Weber, 1995. "Humps and bumps in lifetime consumption," IFS Working Papers W95/14, Institute for Fiscal Studies.
- Attanasio, O. & Banks, J. & Meghir, C. & Weber, G., 1995. "Humps and bumps in lifetime consumption," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Hamermesh, Daniel S, 1984.
"Consumption during Retirement: The Missing Link in the Life Cycle,"
The Review of Economics and Statistics,
MIT Press, vol. 66(1), pages 1-7, February.
- Daniel S. Hamermesh, 1984. "Consumption During Retirement: The Missing Link in the Life Cycle," NBER Working Papers 0930, National Bureau of Economic Research, Inc.
- B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 2001.
"What Accounts for the Variation in Retirement Wealth among U.S. Households?,"
American Economic Review,
American Economic Association, vol. 91(4), pages 832-857, September.
- B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 1997. "What Accounts for the Variation in Retirement Wealth Among U.S. Households?," NBER Working Papers 6227, National Bureau of Economic Research, Inc.
- B. Douglas Bernheim & Jonathan Skinner & Steven Weinberg, 1997. "What Accounts for the Variation in Retirement Wealth Among U.S. Households?," Working Papers 97035, Stanford University, Department of Economics.
- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- Lawrence Kotlikoff & Avia Spivak & Lawrence H. Summers, 1980.
"The Adequacy of Savings,"
Cowles Foundation Discussion Papers
569, Cowles Foundation for Research in Economics, Yale University.
- Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June.
- A. L. Robb & J. B. Burbidge, 1989. "Consumption, Income, and Retirement," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 522-42, August.
- Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-30, May.
- Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.