FOI Seminar 1 April 2011

Alessandro Martinello (SFI –The Danish National Centre for Social Research):

 

Consumption Retirement Puzzle in Europe; Seep through the Selection

 

Friday 1 April 2011, 12.30-13.30 Building A, seminar room 1

Abstract:

The thesis analyzes the observed drop in consumption that individuals sustain at the time of retirement - a phenomenon known as Retirement Consumption Puzzle - in ten European countries. Applying a propensity score matching technique to SHARE data, I show how endogenous selection into retirement explains most of the drop in expenditure for food in most of the examined countries. Then, focusing on the difference between consumption and expenditure, a simple static model of consumption choices demonstrates how home-production activities can explain the residual observed drop in food expenditure in a context of fixed consumption and variable food prices.