Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105934
Authors: 
Beblo, Miriam
Schreiber, Sven
Year of Publication: 
2010
Series/Report no.: 
IMK Working Paper 14/2010
Abstract: 
According to the life-cycle theory of consumption and saving, foreseeable retirement events should not reduce consumption. Whereas some consumption expenditures may fall when they are self-produced (given higher leisure after retirement), this argument applies especially to housing consumption which can hardly be substituted by home production. We test this hypothesis using micro data for Germany (GSOEP) and find that income reductions when entering retirement have a negative effect on housing expenditures for tenants. For some econometric specifications, this effect is significantly stronger than the one of income changes at other times. While this result suggests that the strict consumption-smoothing hypothesis is violated for the subgroup of nonhome owners, the effect is quantitatively small, which explains the ambiguity of previous findings.
Subjects: 
consumption smoothing
retirement-consumption puzzle
GSOEP
JEL: 
C33
D91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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