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A flatter life-cycle consumption profile

Author

Listed:
  • Fernando Alexandre

    (University of Minho, Department of Economics/NIPE)

  • Pedro Bação

  • Miguel Portela

    (NIPE/Universidade do Minho and IZA Bonn)

Abstract

In this paper we report and discuss estimates of life-cycle consumption profiles obtained using microdata for Portuguese households. The estimated profiles are much flatter than the profiles usually reported in the literature for other countries, namely the Netherlands, the UK and the USA. We argue that the high degree of consumption smoothing in Portugal may be related to easier access to credit, a generous social security system and familyties. In addition, we also report estimates of cohort and business cycle effects on consumption. The estimated cohort effects are consistent with the post-war progress in standards of living. The business cycle estimates suggest that the recent debt crisis has had a strong negative impact on household consumption

Suggested Citation

  • Fernando Alexandre & Pedro Bação & Miguel Portela, 2019. "A flatter life-cycle consumption profile," NIPE Working Papers 01/2019, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:01/2019
    as

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    File URL: http://repositorium.sdum.uminho.pt/bitstream/1822/60219/1/NIPE_WP_1_2019.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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