Heterogeneity in spending change at retirement.

The Retirement of a Consumption Puzzle

This paper summarizes five facts that have emerged from the recent literature on consumption behavior during retirement. Collectively, the recent literature has shown that there is no puzzle with respect to the spending patterns of most households as they transition into retirement. In particular, the literature has shown that there is substantial heterogeneity in spending changes at retirement...

Changes in Consumption and Activities at Retirement

The life-cycle model is used by many economists to study savings and retirement behavior. Th e central premise of the model is that individuals will save during their working lives so that they will have adequate resources at retirement (when wages are no longer a source of income) to maintain the standard of living they enjoyed during their working lives. Some empirical fi ndings, however, are...

The Retirement-Consumption Puzzle: Actual Spending Change in Panel Data

The simple one-good model of life-cycle consumption requires that consumption be continuous over retirement; yet prior research based on partial measures of consumption or on synthetic panels indicates that spending drops at retirement, a result that has been called the retirement-consumption puzzle. Using panel data on total spending, nondurable spending and food spending, we find that spendin...

No Retirement Consumption Puzzle–the Effect of Labour Supply on Disaggregated Life Cycle Expenditure in the Later Life

This paper examines the life cycle profile of disaggregated nondurable expenditures for Chinese urban households. The result shows that aggregated expenditure conceals substantial heterogeneity in the life-cycle pattern of expenditure subcomponents and underestimates the uninsurable permanent income risk that households face. Based on the observed empirical pattern, I test how much of the adjus...

Change in Household Spending After Retirement: Results from a Longitudinal Sample.