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Does Consumption Decrease After Retirement, and for Whom?

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  • Kimhi, Ayal
  • Sender, Maya

Abstract

This paper examines the decline in consumption after retirement by quantiles of the consumption distribution, by gender, by pre‐retirement employment status and by age. The retirement‐induced decline in consumption is larger among those who were employees than among those who were self‐employed, but only for males. In contrast, those who did not work do not experience a decline in consumption when they cross the official retirement age, and in some cases their consumption actually increases. Without allowing for age‐specific effects, it was found that the decline in consumption is largest in the middle of the consumption distribution, while after allowing the decline in consumption to depend on age, it was found that the decline is largest at lower levels of consumption and becomes more moderate as the person climbs along the consumption distribution. These results are consistent with the hypothesis that inadequate savings are a major reason for the decline in consumption after retirement.

Suggested Citation

  • Kimhi, Ayal & Sender, Maya, 2018. "Does Consumption Decrease After Retirement, and for Whom?," Discussion Papers 290054, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    • Handle: RePEc:ags:huaedp:290054
    DOI: 10.22004/ag.econ.290054
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    Keywords

    Food Consumption/Nutrition/Food Safety; Labor and Human Capital;

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