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The Financial Crisis and Consumers' Income and Pension Expectations

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  • Luc Bissonnette
  • Arthur van Soest

Abstract

The expectations of economic agents play a crucial role in almost any inter-temporal economic model. A period of economic crisis may make consumer expectations more pes- simistic and affect their saving or retirement plans and decisions. Using 2009-2012 panel data for a representative sample of the Dutch population, we analyze consumers’ per- ception of the crisis and its expected impact on the household. Second, we analyze the deviations between short run income expectations and realizations, and how they are shaped by how people perceive the crisis. Finally, we study how crisis perceptions affect retirement age and income expectation.

Suggested Citation

  • Luc Bissonnette & Arthur van Soest, 2015. "The Financial Crisis and Consumers' Income and Pension Expectations," Cahiers de recherche 1502, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    • Handle: RePEc:lvl:criacr:1502
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    References listed on IDEAS

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    1. Michael D. Hurd & Susann Rohwedder, 2013. "Measuring Total Household Spending in a Monthly Internet Survey: Evidence from the American Life Panel," NBER Chapters,in: Improving the Measurement of Consumer Expenditures, pages 365-387 National Bureau of Economic Research, Inc.
    2. Christelis, Dimitris & Georgarakos, Dimitris & Jappelli, Tullio, 2015. "Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 21-41.
    3. Michael D. Hurd & Susann Rohwedder, 2010. "Effects of the Financial Crisis and Great Recession on American Households," NBER Working Papers 16407, National Bureau of Economic Research, Inc.
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    5. Michael D. Hurd & Susann Rohwedder, 2013. "Measuring Total Household Spending in a Monthly Internet Survey: Evidence from the American Life Panel," NBER Chapters, in: Improving the Measurement of Consumer Expenditures, pages 365-387, National Bureau of Economic Research, Inc.
    6. Das, Marcel & van Soest, Arthur, 1999. "A panel data model for subjective information on household income growth," Journal of Economic Behavior & Organization, Elsevier, vol. 40(4), pages 409-426, December.
    7. Crawford, Rowena, 2013. "The effect of the financial crisis on the retirement plans of older workers in England," Economics Letters, Elsevier, vol. 121(2), pages 156-159.
    8. Luc Bissonnette & Arthur van Soest, 2012. "The future of retirement and the pension system: How the public’s expectations vary over time and across socio-economic groups," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.
    9. Daniel Vuuren, 2014. "Flexible Retirement," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 573-593, July.
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    11. Charles Bellemare & Luc Bissonnette & Sabine Kröger, 2011. "Flexible Approximation of Subjective Expectations Using Probability Questions," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 30(1), pages 125-131, April.
    12. de Bresser, Jochem & van Soest, Arthur, 2013. "Survey response in probabilistic questions and its impact on inference," Journal of Economic Behavior & Organization, Elsevier, vol. 96(C), pages 65-84.
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    Cited by:

    1. Massenot, Baptiste & Pettinicchi, Yuri, 2019. "Can households see into the future? Survey evidence from the Netherlands," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 77-90.

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    More about this item

    Keywords

    Subjective probabilities; retirement; replacement rates;
    All these keywords.

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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