Leisure and housing consumption after retirement: new evidence on the life-cycle hypothesis

Miriam Beblo () and Sven Schreiber
Additional contact information
Miriam Beblo: Universität Hamburg

Review of Economics of the Household, 2022, vol. 20, issue 1, No 12, 305-330

Abstract: Abstract Foreseeable income reductions around retirement should not affect aggregate consumption. However, given higher leisure endowments after retirement, theory also predicts lower consumption of leisure substitutes. To avoid misinterpreting this predicted drop as a puzzle, our novel approach focuses on housing consumption (complementary to leisure in utility) and controls for leisure changes. In Germany tenants represent roughly half of all households, making many housing expenditures directly observable in micro data. We find significant negative impacts of the retirement status on housing consumption, which is hard to reconcile with life-cycle theory. Despite the lock-in nature of past housing decisions, income reductions at retirement have additional – though small – effects on housing.

Keywords: Consumption smoothing; Retirement-consumption puzzle; SOEP data; Housing decisions; D91 (Intertemporal Consumer Choice; Life Cycle Models and Saving), E21 (Consumption; Saving; Wealth) (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11150-021-09569-4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Leisure and Housing Consumption after Retirement: New Evidence on the Life-Cycle Hypothesis (2016)
Working Paper: Leisure and housing consumption after retirement: New evidence on the life-cycle hypothesis (2016)
Working Paper: Leisure and Housing Consumption after Retirement: New Evidence on the Life-Cycle Hypothesis (2016)
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:kap:reveho:v:20:y:2022:i:1:d:10.1007_s11150-021-09569-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11150/PS2

DOI: 10.1007/s11150-021-09569-4

Access Statistics for this article

Review of Economics of the Household is currently edited by Shoshana Grossbard

More articles in Review of Economics of the Household from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().