Households’ joint consumption spending and home production responses to retirement in the US

Jim Been (), Susann Rohwedder and Michael Hurd ()
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Jim Been: Leiden University and NetsparLeiden

Review of Economics of the Household, 2021, vol. 19, issue 4, No 2, 959-985

Abstract: Abstract We analyze the effect of retirement on households’ joint consumption spending and home production decisions using a micro panel with detailed spending and time use categories of US households. For causal identification, we use panel data regressions. Our results suggest that the spending drop at retirement is partially compensated by increases in home production of the retiring household member. Home production can particularly make up for losses in spending categories that are well-substitutable by home production, although only about 12% of total pre-retirement consumption spending, but there is no evidence that households fully replace consumption spending at retirement. In a Life-Cycle Model, we find no empirical evidence for full consumption smoothing at retirement.

Keywords: Consumption; Home production; Retirement; Panel data; US households; C33; D1; H55; J22; J26 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11150-020-09528-5

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