Is the basic life-cycle theory of consumption becoming more relevant? Evidence from Portugal

Fernando Alexandre, Pedro Bação and Miguel Portela ()
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Fernando Alexandre: NIPE/Universidade do Minho, Escola de Economia e Gestão, Campus de Gualtar

Review of Economics of the Household, 2020, vol. 18, issue 1, No 5, 93-116

Abstract: 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. 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 median standards of living. However, there is a deceleration in the trend of consumption growth for more recent cohorts. The business cycle estimates suggest that the recent debt crisis has had a strong negative impact on household consumption.

Keywords: Cohorts; Consumption; Life-cyle; Microdata (search for similar items in EconPapers)
JEL-codes: D15 E21 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11150-019-09471-0

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