What Accounts for the Variation in Retirement Wealth Among U.S. Households?

Bernheim, B. Douglas; Skinner, Jonathan; Weinberg, Steven A.

doi:10.3386/w6227

Cited by 101 publications

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“…We accordingly estimate the polynomial regressions using data from ages 59 and below and ages 61 and above, and we evaluate changes at 60 by extrapolating these regression curves to the cutoff age of 60. 8 We consider widely varying ranges of age for the retirement equation, 6, 10, and 15 years above and below the cutoff, corresponding to age ranges 54-66, 50-70, and 45-75. The sample sizes corresponding to the three windows are 12,050, 21,576, and 33,149, respectively.…”

Section: The Retirement Ratementioning

confidence: 99%

“…A wider range provides more observations, thereby adding to the 8 We use a uniform kernel for convenience, since more complicated weighting or different kernels rarely make much difference in practice. The only difference between regressions using a uniform kernel and those using more complicated kernels is that the latter put more weight on observations closer to the cutoff.…”

Section: The Retirement Ratementioning

confidence: 99%

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Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline?

Dong

Yang

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTThis paper investigates household consumption changes at retirement by utilizing a comprehensive, diary-based household survey from China. The survey contains both consumption quantity and price information, which permits separating quantity changes from price changes. The mandatory retirement policy in China provides a quasi-experimental setting for identification of the true causal effects of fully anticipated retirement. Using regression discontinuity models, we show that food expenditure declines at retirement, particularly among the low-education group, and that the decline is driven by price declines instead of quantity declines. Shopping time for food increases at retirement, consistent with the price and quantity changes. JEL Classification Codes: J26, C21Key Words: Retirement-consumption puzzle, Mandatory retirement, Regression discontinuity, Consumption vs. expenditure, Time use, Home production. Acknowledgments:The authors would like to thank James Heckman, Michael Hurd, Robert Pollak, Josh Angrist, Daron Acemoglu, Amy Finkelstein, Michael Greenstone, David Autor, Esther Duflo, Jim Poterba, Kerwin Charles, seminars participants at MIT, and participants at the CEA, WEAI, CES annual conference for helpful comments. All errors are our own. This research is partly supported by an Early Career Research Grant from the W. E. Upjohn Institute for Employment Research. Mandatory Retirement and the Consumption Puzzle:Prices Decline or Quantities Decline?Yingying Dong, Dennis Yang * † University of California, Irvine, and University of Virginia February 2016 AbstractThis paper investigates household consumption changes at retirement by utilizing a comprehensive, diary-based household survey from China. The survey contains both consumption quantity and price information, which permits separating quantity changes from price changes. The mandatory retirement policy in China provides a quasi-experimental setting for identification of the true causal effects of fully anticipated retirement. Using regression discontinuity models, we show that food expenditure declines at retirement, particularly among the loweducation group, and that the decline is driven by price declines instead of quantity declines. Shopping time for food increases at retirement, consistent with the price and quantity changes. JEL codes: J26, C21

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Section: The Retirement Ratementioning

confidence: 99%

Section: The Retirement Ratementioning

confidence: 99%

Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline?

Dong

Yang

2016

SSRN Journal

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“…In this case household consumption should be constant over time and not change at retirement (HAI-DER;STEPHENS JR., 2007). However, several studies have founded evidences which challenges the implications of LCPIT showing that consumption tends to decrease at retirement (HAMERMESH, 1984;FAIR;DOMINGUEZ, 1991;BANKS;BLUNDELL;TANNER, 1998;BERNHEIM;SKINNER;WEINBERG, 2001;HURD;ROHWEDDER, 2003;SCHWERDT, 2005;HAIDER;STEPHENS JR., 2007;BAT-TISTIN et al, 2009;LI;CHI;WU, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

“…while other tends to be less favored (food, clothing, transportation, etc.). The effect of demographic change on household consumption is another important channel affecting economic system and some studies have found a retirement consumption puzzle, evidencing that household consumption tends to decrease at the retirement (HAMERMESH, 1984;FAIR;DOMINGUEZ, 1991;BANKS;BLUNDELL;TANNER, 1998;BERNHEIM;SKINNER;WEINBERG, 2001;HURD;ROHWEDDER, 2003;SCHWERDT, 2005;HAIDER;STEPHENS JR., 2007;BATTISTIN et al, 2009;LI;CHI;WU, 2015). This result challenges the implications of the life cycle/permanent income hypothesis by which rational households should be saving adequately for retirement and their consumption would be expected to not reduce.…”

Section: Introductionmentioning

confidence: 99%

The Retirement Consumption Puzzle: Evidences for Brazil and the State of Rio Grande Do Sul

Stampe

Porsse

Portugal

et al. 2017

RAE

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Abstract:The life cycle/permanent income theories predict that consumption would be constant over time but such result has been challenged by some empirical studies which show a systemic decrease in consumption at retirement. This paper aims to investigate the so-called retirement consumption puzzle for Brazil and the State of Rio Grande do Sul. We estimated consumption functions controlling age effects for 12 composite goods using information from the 2008-2009 Household Budget Survey. The results showed that households' expenditures systematic decrease with age for 7 composite goods (food, clothing, transport, hygiene, education, recreation and miscellaneous) and increase with age for 2 composite good (health care and housing). The patterns found to the households' expenditures by age structure brings evidence of retirement consumption puzzle in Brazil.Keywords: Households behavior. Demographics. Retirement consumption puzzle. Resumo:As teorias da renda permanente e do ciclo de vida predizem que o consumo é uma variável constante ao longo do tempo, porém esse resultado tem sido desafiado pelas evidencias empíricas de alguns estudos que mostram uma redução sistemática no consumo das famílias na aposentadoria. O objetivo do presente artigo é investigar o chamado enigma do consumo na aposentadoria para o caso do Brasil e do Estado do Rio Grande do Sul. Para tanto, a partir dada base de dados da Pesquisa de Orçamentos Familiares

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“…However, a statistical demonstration of the hot hands phenomena, a non-trivial statistical task, does not imply that individuals are able to also see through and discover the hot hands e¤ect. 15 Some of the clearest and most persuasive evidence for hot hands comes from a novel …eld experiment by Guryan and Kearney (2008). They …nd that sales at lotto stores that have sold a winning ticket soar in the immediate weeks following the lotto win.…”

Section: The Hot Hands Fallacymentioning

confidence: 99%

Heuristics and Public Policy: Decision Making Under Bounded Rationality

2018

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How do human beings make decisions when, as the evidence indicates, the assumptions of the Bayesian rationality approach in economics do not hold? Do human beings optimize, or can they? Several decades of research have shown that people possess a toolkit of heuristics to make decisions under certainty, risk, subjective uncertainty, and true uncertainty (or Knightian uncertainty). We outline recent advances in knowledge about the use of heuristics and departures from Bayesian rationality, with particular emphasis on growing formalization of those departures, which add necessary precision. We also explore the relationship between bounded rationality and libertarian paternalism, or nudges, and show that some recent objections, founded on psychological work on the usefulness of certain heuristics, are based on serious misunderstandings.

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What Accounts for the Variation in Retirement Wealth Among U.S. Households?

Cited by 101 publications

References 0 publications

Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline?

Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline?

The Retirement Consumption Puzzle: Evidences for Brazil and the State of Rio Grande Do Sul

Heuristics and Public Policy: Decision Making Under Bounded Rationality

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