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Title:Household Saving and Full Consumption over the Life Cycle PDF Logo
Authors:Apps, Patricia
Rees, Ray
Issue Date:2001
Series/Report no.:IZA Discussion paper series 280
Abstract:This paper extends the standard model of life cycle consumption, saving and labor supply in a number of directions. First, it argues that consumption should be defined as expenditure on household production as well as on market goods, that is, we are interested in life cycle profiles of full consumption. If this is done, several well-known puzzles concerning life cycle consumption behaviour are resolved. Secondly, we stress the importance of the heterogeneity of household behaviour in respect of female labour supply and saving, and provide evidence to show that these are very closely related across households. Finally, we formulate theoretical and empirical models incorporating these ideas and use them to show that policy changes, such as a reduction in the progressivity of income taxation, can have effects that contrast sharply with those suggested in the existing literature.
Subjects:Saving
household production
full consumption
life cycle
JEL:D13
D91
H31
J22
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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