Social Security Benefits, Consumption Expenditure, and the Life Cycle Hypothesis

David Wilcox

Journal of Political Economy, 1989, vol. 97, issue 2, 288-304

Abstract: This paper examines the impact of changes in social security benefits on aggregate consumption expenditure. Under the null hypothesis, there should be no contemporaneous effect at the monthly frequency because increases in benefits have always been announced at least six weeks prior to payment. The paper develops overwhelming evidence--contrary to the null--that benefits have affected aggregate spending. The results have strong implications for several important issues, including Ricardian equivalence, government policy irrelevance, and the excess sensitivity of consumption to changes in income. Copyright 1989 by University of Chicago Press.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
http://dx.doi.org/10.1086/261604 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.

Related works:
Working Paper: Social security benefits, consumption expenditure, and the life cycle hypothesis (1987)
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:ucp:jpolec:v:97:y:1989:i:2:p:288-304

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().