Expenditures at retirement by Spanish households
Jose Labeaga and
Ruben Osuna ()
No 2007-36, Working Papers from FEDEA
The life cycle theory predicts the smoothing of consumption over time by forward-looking agents with concave utility functions. However, many empirical studies have shown a significant drop in expenditures after retirement in US, Italy, Germany, UK, Spain and other countries. This contradicts the main result of the life cycle model, and this gap between theory and reality is known as the retirement consumption puzzle since the seminal paper by Banks, Blundell and Tunner (1998). In this study, we analyze the impact of retirement on income and a breakdown of expenditures by estimating complete demand systems and single equations using an unbalanced panel of Spanish households. Although in terms of the non-durable expenditures modelled we observe the puzzle, the categories related to a decrease in consumption are only those subsidized for retirees (health expenditures and public transport).
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fda:fdaddt:2007-36
Access Statistics for this paper
More papers in Working Papers from FEDEA
Bibliographic data for series maintained by Carmen Arias ().