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How is aggregate household consumption affected jointly by longevity, pension, and aging? Theory and evidence

Author

Listed:
  • Lei He

    (Business School of Hunan Normal University)

  • Shuyi Zhou

    (Business School of Hunan Normal University)

  • Zilan Liu

    (Business School of Hunan Normal University)

Abstract

The effects of longevity and pension on consumption or savings are investigated separately in previous studies. In this paper, we first construct a theoretical model which shed light on explicit joint role of longevity at different age, pension, and aging on aggregate household consumption. The testable implications are provided by theoretical discussion and are supported by empirical results based on panel data. The negative effect of longevity on the aggregate household consumption is strengthened by the aging. The pension has a positive impact on aggregate household consumption, and it is intensified by aging. The aggregate household consumption is affected positively by aging.

Suggested Citation

  • Lei He & Shuyi Zhou & Zilan Liu, 2020. "How is aggregate household consumption affected jointly by longevity, pension, and aging? Theory and evidence," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(4), pages 499-512, December.
    • Handle: RePEc:spr:inrvec:v:67:y:2020:i:4:d:10.1007_s12232-020-00352-y
    DOI: 10.1007/s12232-020-00352-y
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    More about this item

    Keywords

    Longevity; Aging; Pension; Aggregate household consumption;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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