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Changes in Consumption at Retirement: Evidence from Panel Data

Author

Listed:
  • Emma Aguila

    (RAND)

  • Orazio Attanasio

    (University College London and Institute for Fiscal Studies, London)

  • Costas Meghir

    (Yale University, University College London, and Institute for Fiscal Studies, London)

Abstract

Previous empirical literature has found a sharp decline in consumption during the first years of retirement, implying that individuals do not save enough for their retirement. This phenomenon is called the retirement consumption puzzle. We find no evidence of the retirement consumption puzzle using panel data from 1980 to 2000. Consumption is defined as nondurable expenditure, a more comprehensive measure than only food used in many of the previous studies. We find that food expenditure declines at retirement, which is consistent with previous studies. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Emma Aguila & Orazio Attanasio & Costas Meghir, 2011. "Changes in Consumption at Retirement: Evidence from Panel Data," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 1094-1099, August.
  • Handle: RePEc:tpr:restat:v:93:y:2011:i:3:p:1094-1099
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    Citations

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    Cited by:

    1. Schreiber, Sven & Beblo, Miriam, 2016. "Leisure and Housing Consumption after Retirement: New Evidence on the Life-Cycle Hypothesis," Annual Conference 2016 (Augsburg): Demographic Change 145924, Verein für Socialpolitik / German Economic Association.
    2. Deng, Tinghe & Chen, Qihui & Bai, Junfei, 2016. "Understanding the Retirement-Consumption Puzzle through the Lens of Food Consumption − Fuzzy Regression-Discontinuity Evidence from Urban China," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235540, Agricultural and Applied Economics Association.
    3. Alexander Zimper & Alexander Ludwig & Max Groneck, 2012. "A Life-Cycle Consumption Model with Ambiguous Survival Beliefs," 2012 Meeting Papers 693, Society for Economic Dynamics.
    4. Sheng Guo & William G. Hardin, 2017. "Financial and Housing Wealth, Expenditures and the Dividend to Ownership," The Journal of Real Estate Finance and Economics, Springer, vol. 54(1), pages 58-96, January.
    5. Deng, Tinghe & Chen, Qihui & Bai, Junfei, 2016. "Understanding the Retirement-Consumption Puzzle through the Lens of Food Consumption − Fuzzy Regression-Discontinuity Evidence from Urban China," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235535, Agricultural and Applied Economics Association.
    6. Zhang, Chuanchuan, 2012. "延迟退休年龄会挤出年轻人就业吗?
      [Will Postponing Retirement Crowd out Youth Employment?]
      ," MPRA Paper 49811, University Library of Munich, Germany, revised Nov 2012.
    7. Jim Been & Michael Hurd & Susann Rohwedder, 2014. "Responses of Time-use to Shocks in Wealth during the Great Recession," Working Papers wp313, University of Michigan, Michigan Retirement Research Center.
    8. Toshiyuki Uemura & Yoshimi Adachi & Tomoki Kitamura, 2017. "Effects of Individual Resident Tax on the Consumption of Near-Retired Households in Japan," Discussion Paper Series 161, School of Economics, Kwansei Gakuin University, revised May 2017.
    9. World Bank, 2012. "Toward Gender Equality in East Asia and the Pacific : A Companion to the World Development Report," World Bank Publications, The World Bank, number 12598, April.
    10. Jonathan Fisher & Joseph Marchand, 2014. "Does the retirement consumption puzzle differ across the distribution?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(2), pages 279-296, June.
    11. Merike Kukk & Dmitry Kulikov & Karsten Staehr, 2016. "Estimating Consumption Responses to Income Shocks of Different Persistence Using Self-Reported Income Measures," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(2), pages 311-333, June.
    12. Eve Caroli & Claudio Lucifora & Daria Vigani, 2016. "Is there a Retirement-Health Care utilization puzzle? Evidence from SHARE data in Europe," DISCE - Working Papers del Dipartimento di Economia e Finanza def049, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    13. Yingying Dong & Dennis Yang, 2016. "Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline?," Upjohn Working Papers and Journal Articles 16-251, W.E. Upjohn Institute for Employment Research.
    14. Ciani, E & Fisher, P, 2013. "Dif-in-dif estimators of multiplicative treatment effects," Economics Discussion Papers 8973, University of Essex, Department of Economics.
    15. Daniel Burkhard, 2015. "Consumption smoothing at retirement: average and quantile treatment effects in the regression discontinuity design," Diskussionsschriften dp1512, Universitaet Bern, Departement Volkswirtschaft.
    16. repec:bla:ecinqu:v:55:y:2017:i:4:p:1738-1758 is not listed on IDEAS
    17. repec:eee:jfpoli:v:73:y:2017:i:c:p:45-61 is not listed on IDEAS
    18. Kyureghian, Gayaneh & Soler, Louis-Georges, 2016. "Life Cycle Consumption of Food: Evidence from French Data," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236785, Agricultural and Applied Economics Association.
    19. Li, Hongbin & Shi, Xinzheng & Wu, Binzhen, 2016. "The retirement consumption puzzle revisited: Evidence from the mandatory retirement policy in China," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 623-637.
    20. repec:eee:joecag:v:3:y:2014:i:c:p:1-10 is not listed on IDEAS
    21. Jang, Bong-Gyu & Lee, Ho-Seok, 2016. "Retirement with risk aversion change and borrowing constraints," Finance Research Letters, Elsevier, vol. 16(C), pages 112-124.
    22. Yingying Dong, 2012. "Regression Discontinuity Applications with Rounding Errors in the Running Variable," Working Papers 111206, University of California-Irvine, Department of Economics.
    23. Itzik Fadlon & David Laibson, 2017. "Paternalism and Pseudo-Rationality," NBER Working Papers 23620, National Bureau of Economic Research, Inc.
    24. Sheng Guo & William Hardin, 2015. "Financial and Housing Wealth, Expenditures and the Dividend to Ownership," Working Papers 1506, Florida International University, Department of Economics.

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