Housing Consumption after Retirement
نویسندگان
چکیده
According to the life-cycle theory of consumption and saving, foreseeable retirement events should not reduce consumption. This argument applies especially to housing consumption, whereas other consumption expenditures may fall when home production substitutes them (given higher leisure after retirement). Using micro panel data for German tenants we find that income drops at entering retirement have a negative effect on housing expenditures. This effect is not significantly stronger than the one from other income drops. While this result suggests that the strict consumption-smoothing hypothesis is violated for the subgroup of non-home owners, the effect is quantitatively small.
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