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Consumption, Working Hours, and Wealth Determination in a Life Cycle Model

Author

Listed:
  • Naohito Abe

    (Hitotsubashi University)

  • Noriko Inakura

    (Japan Center for Economic Research)

  • Tomoaki Yamada

    (Rissho University)

Abstract

This paper presents an empirical analysis of a life cycle model. We incorporate labor supply and family structure into the standard precautionary savings model and estimate structural parameters based on the moment conditions for the life cycle profiles of consumption, working hours, and wealth accumulation. Our empirical analyses with Japanese household data reveal that consideration of both family structure and idiosyncratic shocks are crucial in modeling consumption and working hours profiles simultaneously under plausible parameter values.

Suggested Citation

  • Naohito Abe & Noriko Inakura & Tomoaki Yamada, 2007. "Consumption, Working Hours, and Wealth Determination in a Life Cycle Model," Bank of Japan Working Paper Series 07-E-14, Bank of Japan.
    • Handle: RePEc:boj:bojwps:07-e-14
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    References listed on IDEAS

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    Cited by:

    1. Kosuke Aoki & Alexander Michaelides & Kalin Nikolov, 2016. "Household Portfolios in a Secular Stagnation World: Evidence from Japan," Bank of Japan Working Paper Series 16-E-4, Bank of Japan.
    2. Zhang, Jinhui & Purcal, Sachi & Wei, Jiaqin, 2021. "Optimal life insurance and annuity demand under hyperbolic discounting when bequests are luxury goods," Insurance: Mathematics and Economics, Elsevier, vol. 101(PA), pages 80-90.
    3. Morita, Hiroshi, 2020. "Fiscal multipliers in the most aged country: Empirical evidence and theoretical interpretation," Discussion paper series HIAS-E-100, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    4. Morita, Hiroshi, 2022. "On the relationship between fiscal multipliers and population aging in Japan: Theory and empirics," Economic Modelling, Elsevier, vol. 108(C).

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    More about this item

    Keywords

    Life Cycle; Consumption; Asset Accumulation; Labor Supply; Structural Estimation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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