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Experimental tests on consumption, savings and pensions

  • Enrique Fatás

    ()

    (LINEX, University of Valencia.)

  • Juan A. Lacomba

    ()

    (Department of Economic Theory and Economic History, University of Granada.)

  • Francisco M. Lagos

    ()

    (Department of Economic Theory and Economic History, University of Granada.)

  • Ana I. Moro

    ()

    (Department of Economic Theory and Economic History, University of Granada.)

As part of the current debate on the reform of pension systems, this article examines the potential effects on consumption behaviour of implementing a lump-sum payment in a public pension system. This work explores an experimental investigation into retirement consumption behaviour with two central features: first, there exists a decreasing probability of surviving; second, there are two sequences of income, one when individual works and another when she is retired. The results show how subjects seem to plan their consumption and saving choices conditionated by both the long horizon with no incomes and the lump-sum payment. This yields, in the majority of periods, a surprising over-saving behaviour.

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File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers08_14.pdf
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Paper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 08/14.

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Length: 31 pages
Date of creation: 23 Dec 2008
Date of revision:
Handle: RePEc:gra:wpaper:08/14
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  1. Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2003. "Voting on Pensions with Endogenous Retirement Age," CEPR Discussion Papers 3778, C.E.P.R. Discussion Papers.
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  17. Enrica Carbone & John D. Hey, 2004. "The effect of unemployment on consumption: an experimental analysis," Economic Journal, Royal Economic Society, vol. 114(497), pages 660-683, 07.
  18. Cremer, Helmuth & Pestieau, Pierre, 2000. "Reforming our pension system: Is it a demographic, financial or political problem?," European Economic Review, Elsevier, vol. 44(4-6), pages 974-983, May.
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