IDEAS home Printed from https://ideas.repec.org/p/imk/wpaper/14-2010.html
   My bibliography  Save this paper

The Life-Cycle Hypothesis Revisited: Evidence on Housing Consumption after Retirement

Author

Listed:
  • Miriam Beblo

    (Berlin School of Economics and Law (HWR))

  • Sven Schreiber

    (Macroeconomic Policy Institute (IMK) in the Hans Boeckler Foundation)

Abstract

According to the life-cycle theory of consumption and saving, foreseeable retirement events should not reduce consumption. Whereas some consumption expenditures may fall when they are self-produced (given higher leisure after retirement), this argument applies especially to housing consumption which can hardly be substituted by home production. We test this hypothesis using micro data for Germany (GSOEP) and find that income reductions when entering retirement have a negative effect on housing expenditures for tenants. For some econometric specifications, this effect is significantly stronger than the one of income changes at other times. While this result suggests that the strict consumption-smoothing hypothesis is violated for the subgroup of nonhome owners, the effect is quantitatively small, which explains the ambiguity of previous findings.

Suggested Citation

  • Miriam Beblo & Sven Schreiber, 2010. "The Life-Cycle Hypothesis Revisited: Evidence on Housing Consumption after Retirement," IMK Working Paper 14-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:wpaper:14-2010
    as

    Download full text from publisher

    File URL: http://www.boeckler.de/pdf/p_imk_wp_14_2010.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lührmann Melanie, 2010. "Consumer Expenditures and Home Production at Retirement – New Evidence from Germany," German Economic Review, De Gruyter, vol. 11(2), pages 225-245, May.
    2. SOEP Group, 2001. "The German Socio-Economic Panel (GSOEP) after More than 15 Years: Overview," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 7-14.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nkote N. Isaac & Rachael Daisy Mirembe, 2011. "Consumer Attitudes, Ethnicity, Lifestyle and Housing Consumption in Kampala," ERES eres2011_273, European Real Estate Society (ERES).
    2. Chunil Kim & Hyobi Choi & Yeol Choi, 2021. "Retirement Age and Housing Consumption: The Case of South Korea," Sustainability, MDPI, vol. 13(3), pages 1-21, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Schaefer, Thilo & Peichl, Andreas, 2006. "Documentation FiFoSiM: integrated tax benefit microsimulation and CGE model," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 06-10, University of Cologne, FiFo Institute for Public Economics.
    2. Felix Büchel & Harminder Battu, 2003. "The Theory of Differential Overqualification: Does it Work?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(1), pages 1-16, February.
    3. Kay Blaufus & Frank Hechtner & Janine K. Jarzembski, 2019. "The Income Tax Compliance Costs of Private Households: Empirical Evidence from Germany," Public Finance Review, , vol. 47(5), pages 925-966, September.
    4. Buchel, Felix, 2002. "The effects of overeducation on productivity in Germany -- the firms' viewpoint," Economics of Education Review, Elsevier, vol. 21(3), pages 263-275, June.
    5. Daniel D. Schnitzlein, 2008. "Verbunden über Generationen: Struktur und Ausmaß der intergenerationalen Einkommensmobilität in Deutschland," SOEPpapers on Multidisciplinary Panel Data Research 80, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Thorsten Schneider, 2004. "Der Einfluss des Einkommens der Eltern auf die Schulwahl," Discussion Papers of DIW Berlin 446, DIW Berlin, German Institute for Economic Research.
    7. Amelie Constant & Yochanan Shachmurove, 2005. "The comparison of incomes of self-employed and salaried workers among German Nationals and immigrants," PIER Working Paper Archive 05-030, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    8. Winkelmann, Rainer, 2006. "Parental separation and well-being of youths: Evidence from Germany," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 197-208, April.
    9. Sarah Holly & Alwine Mohnen, 2012. "Impact of Working Hours on Work-Life Balance," SOEPpapers on Multidisciplinary Panel Data Research 465, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Joachim R. Frick & Markus M. Grabka & Olaf Groh-Samberg, 2007. "Economic Gains from Publicly Provided Education in Germany," SOEPpapers on Multidisciplinary Panel Data Research 28, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Constant, Amelie F. & Gataullina, Liliya & Zimmermann, Klaus F., 2009. "Ethnosizing immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 274-287, March.
    12. Robert Orlowski & Regina T. Riphahn, 2008. "The East German Wage Structure after Transition," SOEPpapers on Multidisciplinary Panel Data Research 148, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Gerhard Wagenhals & Jürgen Buck, 2006. "Auswirkungen von Steueränderungen im Bereich Entfernungspauschale und Werbungskosten: Ein Mikrosimulationsmodell," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 273/2006, Department of Economics, University of Hohenheim, Germany.
    14. Hendrik Jürges, 2006. "Gender ideology, division of housework, and the geographic mobility of families," Review of Economics of the Household, Springer, vol. 4(4), pages 299-323, December.
    15. Maarten Van Ham & Felix Buchel, 2006. "Unwilling or unable? spatial and socio-economic restrictions on females' labour market access," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 345-357.
    16. Anika Rasner & Ralf K. Himmelreicher & Markus M. Grabka & Joachim R. Frick, 2007. "Best of Both Worlds: Preparatory Steps in Matching Survey Data with Administrative Pension Records ; The Case of the German Socio-Economic Panel and the Scientific Use File Completed Insurance Biograp," SOEPpapers on Multidisciplinary Panel Data Research 70, DIW Berlin, The German Socio-Economic Panel (SOEP).
    17. Jennifer Hunt, 2004. "Are migrants more skilled than non-migrants? Repeat, return, and same-employer migrants," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 830-849, November.
    18. Amelie Constant & Klaus Zimmermann, 2011. "Circular and Repeat Migration: Counts of Exits and Years Away from the Host Country," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(4), pages 495-515, August.
    19. Oliver Schilling, 2006. "Development of Life Satisfaction in Old Age: Another View on the "Paradox''," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 75(2), pages 241-271, January.
    20. Markus Gangl & Thomas A. DiPrete, 2004. "Kausalanalyse durch Matchingverfahren," Discussion Papers of DIW Berlin 401, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    consumption smoothing; retirement-consumption puzzle; GSOEP;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imk:wpaper:14-2010. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sabine Nemitz (email available below). General contact details of provider: https://edirc.repec.org/data/imkhbde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.