The retirement of a consumption puzzle
By: Erik Hurst.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- working paper 13789; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13789.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper summarizes five facts that have emerged from the recent literature on consumption behavior during retirement.  Collectively, the recent literature has shown that there is no puzzle with respect to the spending patterns of most households as they transition into retirement.  In particular, the literature has shown that there is substantial heterogeneity in spending changes at retirement across consumption categories.  The declines in spending during retirement for the average household are limited to the categories of food and work related expenses.  Spending in nearly all other categories of non-durable expenditure remains constant or increases.  Moreover, even though food spending declines during retirement, actual food intake remains constant.  The literature also shows that there is substantial heterogeneity across households in the change in expenditure associated with retirement.  Much of this heterogeneity, however, can be explained by households involuntarily retiring due to deteriorating health.  Overall, the literature shows that the standard model of lifecycle consumption augmented with home production and uncertain health shocks does well in explaining the consumption patterns of most households as they transition into retirement"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/13/2008.

Includes bibliographical references.

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Mode of access: World Wide Web.