The Retirement-Consumption Puzzle: A Marital Bargaining Approach

Abstract

Evidence from several countries reveals a substantial drop in household consumption around the age of retirement that is difficult to explain with life-cycle models. Using food consumption data from more than 550 households from the Panel Study of Income Dynamics for the years 1979 - 1986 & 1989 - 1992, we find that married couple households decrease their expenditures on both food consumed at home and away from home by about 8 percent following the retirement of the male household head. This result is robust for several alternative definitions of retirement. No significant decrease in consumption is found for single households, either in a sample of males or a pooled sample of single males and females. These results are consistent with a model of marital bargaining in which wives prefer to save more than their husbands to support an expected longer retirement period, and relative control over household decisions is affected by control over market income.

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Document Details

Document Type
Technical Report
Publication Date
Feb 01, 2001
Accession Number
ADA392262

Entities

People

  • Richard Startz
  • Shelly Lundberg
  • Steven Stillman

Organizations

  • RAND Corporation

Tags

Communities of Interest

  • Biomedical
  • C4I

DTIC Thesaurus Topics

  • Bargaining
  • Coefficients
  • Cycles
  • Data Science
  • Demographic Cohorts
  • Dynamics
  • Economic Models
  • Economics
  • Employment
  • Equations
  • Families (Human)
  • Life Cycles
  • Regression Analysis
  • Specifications
  • Standards
  • Statistics
  • Surveys

Fields of Study

  • Economics

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