Is there a retirement consumption puzzle in Italy

By R. Miniaci, C. Monfardini, G. Weber. 2003

112 citations recorded by the source corpus.

In this paper we investigate the way consumption changes around retirement in Italy. Using micro data covering the 1985-96 period, we find that consumption age patterns are similar to those found in the US and other developed countries, despite the much more wide-spread cohabitation of different generations. We also document the existence of a one-off drop in consumption at retirement of the household head, as in the UK and the US, and find that consumption of work-related goods falls around retirement age and home production of food and other goods increases. Given that we can provide evidence that Italian households who retired over the sample period knew reasonably well what their pension income would be, the only reason why forward looking consumers should reduce spending around retirement is because of their increased consumption of leisure. We do find evidence that the abrupt falls in total non-durable consumption at retirement disappear when leisure is taken into account, in agreement with the predictions of the life-cycle theory. This finding is robust to the way consumption is attributed to different household members, and to exclusion of non-nuclear households from the analysis.

Subfields: Accounting, Demography, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/5dc438bc74ac7611550c4c69f0b5a6f2823e3907

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Citations in the corpus

Consumer Expenditures and Home Production at Retirement – New Evidence from Germany (2007, methodology): “Banks et al. (1998) and Smith (2006) provide empirical evidence for the United Kingdom; Gustman and Steinmeier (1999), Hamermesh (1984) and Hurd and Rohwedder (2003, 2005, 2006) for the United States; and Miniaci et al. (2003) for Italy.”
Reconciling Cyclical Movements in the Marginal Value of Time and the Marginal Product of Labor (2009, background): “Miniaci, Monfardini, and Weber (2003) fit a detailed model to Italian cohort data on nondurable consumption in a specification of the level of consumption that distinguishes age effects from retirement effects.”
The Retirement of a Consumption Puzzle (2008, unknown): “Similarly, using data from the Italian Survey of Family Budgets (ISFB), Miniaci et al. (2003) analyze consumption declines by consumption category for Italian households.”