Consumption Puzzle at Retirement-mpirical Evidence from Taiwan
Date Issued
2009
Date
2009
Author(s)
Huang, Wan-Chia
Abstract
Abstractife-cycle model predicts that people remains smoothing consumption during the transition from work into retirement. A lot of evidences from some countries reveal a substantial drop in consumption after retired people. This phenomenon has been called the retirement consumption puzzle. It is difficult to explain with life-cycle hypothesis.he objective of this study is to explore what happens to the consumption of elderly after retirement in Taiwan. The data employed is from the Survey of Health and Living Status of the Elderly in Taiwan, conducted by the Department of Health in Taiwan. Here we pick up the data of last two years (1999, 2003). Panel Tobit model with a difference-in-differences method is used here to capture the effect of retirement.esults of the empirical analysis show that a decline in consumption for elderly who transition from employment to retirement. Males consume less than females around the age of retirement. Education effects the consumption of elderly negatively.hese results suggest there is the retirement consumption puzzle in Taiwan. The individuals do not remain smooth consumption after retirement as predicted by the life-cycle model.
Subjects
elderly retirement
consumption puzzle
Life-cycle hypothesis
Panel Tobit model
difference-in-differences method
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-98-R96627017-1.pdf
Size
23.53 KB
Format
Adobe PDF
Checksum
(MD5):2ad10c759106f8c66a03267bc2db20aa