Is there a retirement consumption puzzle in Japan? Evidence based on panel data on households in the agricultural sector

Masahiro Hori and Keiko Murata

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: Taking advantage of annual panel data on farm households collected by the Statistical Survey on Farm Management and Economy, this paper investigates whether a retirement consumption puzzle can be observed in Japan and, given that this is the case, what the reasons are. Our long-run panel data allow us to examine the behavior of households whose head actually retired during the observation period. Our analysis shows that households’ expenditure does decline after the retirement of the household head. What is more, changes in family size or other demographic factors appear to only marginally account for the expenditure decline upon retirement. Changes in life-style/preferences after retirement also do not appear to fully explain the expenditure decline, since the decline in expenditure is strongly correlated with the magnitude of the decline in income. Further, we find that the expenditure decline is larger for households with smaller net financial assets, which implies that part of the income-expenditure correlation around retirement is probably due to unanticipated negative income shocks. However, our analysis also implies that the consumption decline at retirement in Japan cannot be explained completely without the presence of myopic households or households that lacked discipline, which contradicts the assumptions of the LC/PIH.

Pages: 32 pages
Date: 2014-02
New Economics Papers: this item is included in nep-age
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.esri.go.jp/jp/archive/e_dis/e_dis308/e_dis308.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.esri.go.jp:80 (No such host is known. )

Related works:
Working Paper: Is there a retirement consumption puzzle in Japan? Evidence based on panel data on households in the agricultural sector (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:esj:esridp:308

Access Statistics for this paper

More papers in ESRI Discussion paper series from Economic and Social Research Institute (ESRI) Contact information at EDIRC.
Bibliographic data for series maintained by HORI nobuko ( this e-mail address is bad, please contact ).