Download or read book Some Answers to the Retirement Consumption Puzzle written by Michael D. Hurd and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The simple one-good model of life-cycle consumption requires "consumption smoothing." According to previous results based on partial spending and on synthetic panels, British and U.S. households apparently reduce consumption at retirement. The reduction cannot be explained by the simple one-good life-cycle model, so it has been referred to as the retirement-consumption puzzle. An interpretation is that at retirement individuals discover they have fewer economic resources than they had anticipated prior to retirement, and as a consequence reduce consumption. This interpretation challenges the life-cycle model where consumers are assumed to be forward-looking. Using panel data, we find that prior to retirement workers anticipated on average a decline of 13.3% in spending and after retirement they recollected a decline of 12.9%: widespread surprise is not the explanation for the retirement-consumption puzzle. Workers with substantial wealth both anticipated and recollected a decline. Therefore, for many workers the decline is not necessitated by the fall in income that accompanies retirement. Poor health is associated with above-average declines. At retirement time spent in activities that could substitute for market-purchased goods increases. Apparently a number of factors contribute to the decline in spending, which, for most of the population, can be accommodated in conventional models of economic behavior.
Download or read book Retirement consumption Puzzle written by Kevin Rink and published by GRIN Verlag. This book was released on 2011 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Retirement Consumption Puzzle written by Daysi Ettel and published by Independently Published. This book was released on 2021-05-19 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: While saving for a retirement is an important topic, it's at least as important as what comes next: Your plan of action once you enter retirement. No matter how well you save during the accumulation phase, it's critical to plan how you convert those assets to income.Through this book, you can answer: -How will you turn a pile of assets into regular paychecks? -Where does Social Security fit in? -How will you handle taxes in retirement? -Will you have enough money to last in your 80s? 90s -What will you do for health care? The author tackles these questions and others head on, using his years of industry experience and stories to illustrate various ways to plan for the unexpected.
Download or read book Home Produced Consumption and the Retirement consumption Puzzle written by Robert Varady and published by . This book was released on 2006 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Retirement Consumption Puzzle written by Susann Rohwedder and published by . This book was released on 2008 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The simple one-good model of life-cycle consumption requires that consumption be continuous over retirement; yet prior research based on partial measures of consumption or on synthetic panels indicates that spending drops at retirement, a result that has been called the retirement-consumption puzzle. Using panel data on total spending, nondurable spending and food spending, we find that spending declines at small rates over retirement, at rates that could be explained by mechanisms such as the cessation of work-related expenses, unexpected retirement due to a health shock or by the substitution of time for spending. In the low-wealth population where spending did decline at higher rates, the main explanation for the decline appears to be a high rate of early retirement due to poor health. We conclude that at the population level there is no retirement consumption puzzle in our data, and that in subpopulations where there were substantial declines, conventional economic theory can provide the main explanation.
Download or read book Handbook of Macroeconomics written by John B. Taylor and published by Elsevier. This book was released on 2016-11-12 with total page 3009 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Macroeconomics Volumes 2A and 2B surveys major advances in macroeconomic scholarship since the publication of Volume 1 (1999), carefully distinguishing between empirical, theoretical, methodological, and policy issues, including fiscal, monetary, and regulatory policies to deal with crises, unemployment, and economic growth. As this volume shows, macroeconomics has undergone a profound change since the publication of the last volume, due in no small part to the questions thrust into the spotlight by the worldwide financial crisis of 2008. With contributions from the world's leading macroeconomists, its reevaluation of macroeconomic scholarship and assessment of its future constitute an investment worth making. - Serves a double role as a textbook for macroeconomics courses and as a gateway for students to the latest research - Acts as a one-of-a-kind resource as no major collections of macroeconomic essays have been published in the last decade - Builds upon Volume 1 by using its section headings to illustrate just how far macroeconomic thought has evolved
Download or read book The Best Retirement of a Consumption Puzzle written by Erik Hurst and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Retirement consumption Puzzle written by Michael Hurd and published by . This book was released on 2003 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Retirement consumption Puzzle written by Shelly Lundberg and published by . This book was released on 2001 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Evidence from several countries reveals a substantial drop in household consumption around the age of retirement that is difficult to explain with life-cycle models. Using food consumption data from more than 550 households from the Panel Study of Income Dynamics for the years 1979-1986 and 1989-1992, the authors find that married couple households decrease their expenditures on both food consumed at home and away from home by about 8 percent following the retirement of the male household head. This result is robust for several alternative definitions of retirement. No significant decrease in consumption is found for single households, either in a sample of males or a pooled sample of single males and females. These results are consistent with a model of marital bargaining in which wives prefer to save more than their husbands to support an expected longer retirement period, and relative control over household decisions is affected by control over market income.
Download or read book Lifecycle Events and Their Consequences written by Kenneth A. Couch and published by Stanford University Press. This book was released on 2013-07-10 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Lifecycle Events and Their Consequences: Job Loss, Family Change, and Declines in Health, editors Kenneth A. Couch, Mary C. Daly, and Julie Zissimopoulos bring together leading scholars to study the impact of unexpected life course events on economic welfare. The contributions in this volume explore how job loss, the onset of health limitations, and changes in household structure can have a pronounced influence on individual and household well-being across the life course. Although these events are typically studied in isolation, they frequently co-occur or are otherwise interrelated. This book provides a systematic empirical overview of these sometimes uncertain events and their impact. By placing them in a unified analytical framework and approaching each of them from a similar perspective, Lifecycle Events and Their Consequences illustrates the importance of a coherent approach to thinking about the inter-relationships among these shifts. Finally, this volume aims to set the future research agenda in this important area.
Download or read book The Retirement Consumption Puzzle and Unretirement written by Vesile Kutlu and published by . This book was released on 2014 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a panel sample of older Americans I investigate the drop in consumption at retirement, i.e. the so-called retirement-consumption puzzle, by taking into account that individuals may re-enter the labor force after being retired. In contrast with previous studies I look at how household consumption responds to the changes in both males' and females' labor market status. This paper has two important findings. Firstly, the unretirement decision is mainly determined by pre-retirement expectations of work and financial factors such as the amount of individuals' accumulated savings at the time of retirement and having an occupational pension plan. Secondly, in a model where retirement and unretirement are instrumented with individuals' retirement expectations, consumption does not respond to retirement or unretirement in line with the predictions of the life-cycle model. Overall, the findings of this paper suggest that individuals are able to smooth their consumption around retirement.
Download or read book The Economics of Consumption written by Tullio Jappelli and published by Oxford University Press. This book was released on 2017-09-01 with total page 313 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumption decisions are crucial determinants of business cycles and growth. Knowledge of how consumers respond to the economic environment and how they react to the risks that they encounter during the life-cycle is therefore important for evaluating stabilization policies and the effectiveness of fiscal packages implemented in response to economic downturns or financial crises. In The Economics of Consumption, Tullio Jappelli and Luigi Pistaferri provide a comprehensive examination of the most important developments in the field of consumption decisions and evaluate economic models against empirical evidence. The first part of the book provides the basic ingredients of economic models of consumption decisions. The central part reviews the empirical literature on the effect of income and wealth changes on consumption and on the relevance of precautionary saving and credit market imperfections. The last chapters extend the basic framework to such important areas as bequests, leisure, lifetime uncertainty, and financial sophistication. Jappelli and Pistaferri shed light on important issues, including how consumption responds to changes in economic resources, how economic circumstances and consumers' characteristics influence behavior, and whether consumption inequality depends on income shocks and their persistence.
Download or read book The retirement of a consumption puzzle written by Erik Hurst and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Retirement Consumption Puzzle written by Arna Olafsson and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses a detailed panel of individual spending, income, account balances, and credit limits from a personal finance management software provider to investigate how expenditures, liquid savings, and consumer debt change around retirement. The longitudinal nature of our data allows us to estimate individual fixed-effects regressions and thereby control for all selection on time-invariant (un)observables. We provide new evidence on the retirement-consumption puzzle and on whether individuals save adequately for retirement. We find that, upon retirement, individuals reduce their spending in both work-related and leisure categories. However, we feel that it is difficult to tell conclusively whether expenses are work related or not, even with the best data. We thus look at household finances and find that individuals delever upon retirement by reducing consumer debt and increasing liquid savings. We argue that these findings are difficult to rationalize via, for example, work-related expenses. A rational agent would save before retirement because of the expected fall in income, and dissave after retirement, rather than the exact opposite.
Download or read book OECD Pensions Outlook 2020 written by OECD and published by OECD Publishing. This book was released on 2020-12-07 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 2020 edition of the OECD Pensions Outlook examines a series of policy options to help governments improve the sustainability and resilience of pension systems.
Download or read book Is There a Retirement consumption Puzzle Evidence Using Subjective Retirement Expectations written by Steven Haider and published by . This book was released on 2004 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous research finds a systematic decrease in consumption at retirement, a finding that is inconsistent with the Life-Cycle/Permanent Income Hypothesis if retirement is an expected event. In this paper, we use workers' subjective beliefs about their retirement dates as an instrument for retirement. After demonstrating that subjective retirement expectations are strong predictors of subsequent retirement decisions, we still find a retirement consumption decline for workers who retire when expected. However, our estimates of this consumption fall are about a third less than those found when we instead rely on the instrumental variables strategy used in prior studies. Finally, we examine a number of hypotheses that have been put forward to explain the retirement consumption decline. We find little empirical support for these explanations in our data.
Download or read book Changes in Consumption at Retirement written by Emma Aguila and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous empirical literature has found a sharp decline in consumption during the first years of retirement implying that individuals do not save enough for their retirement. This phenomenon has been called the retirement consumption puzzle. In contrast to some of the previous studies, the authors find no evidence of the retirement consumption puzzle during the first years of retirement. Consumption is defined as nondurable expenditure, a more comprehensive measure than only food used in many previous studies. Food expenditure at retirement decreases. The latter could be explained by a reallocation of the budget shares after retirement to adjust to a new stage in the life cycle. These results suggest that food expenditure is not an accurate measure to test the Life Cycle Model.
