Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Groves keynote speaker at MIDAS symposium, Nov 15-16: "Big Data: Advancing Science, Changing the World"

Shaefer says drop child tax credit in favor of universal, direct investment in American children

Buchmueller breaks down partisan views on Obamacare

More News


Gonzalez, Alter, and Dinov win NSF "Big Data Spokes" award for neuroscience network

Post-doc Melanie Wasserman wins dissertation award from Upjohn Institute

ISR kicks off DE&I initiative with lunchtime presentation: Oct 13, noon, 1430 ISR Thompson

U-M ranked #4 in USN&WR's top public universities

More Highlights

Next Brown Bag

Mon, Oct 24 at noon:
Academic innovation & the global public research university, James Hilton

Estimating Life-Cycle Parameters from Consumption Behavior at Retirement

Archived Abstract of Former PSC Researcher

Laitner, John, and Daniel Silverman. 2005. "Estimating Life-Cycle Parameters from Consumption Behavior at Retirement." NBER Working Paper 11163National Bureau of Economic Research.

Using pseudo-panel data, we estimate the structural parameters of a life--cycle consumption model with discrete labor supply choice. A focus of our analysis is the abrupt drop in consumption upon retirement for a typical household. The literature sometimes refers to the drop, which in the U.S. Consumer Expenditure Survey we estimate to be approximately 16%, as the "retirement--consumption puzzle." Although a downward step in consumption at retirement contradicts predictions from life--cycle models with additively separable consumption and leisure, or with continuous work-hour options, a consumption jump is consistent with a setup having nonseparable preferences over consumption and leisure and requiring discrete work choices. This paper specifies a life--cycle model with these latter two elements, and it uses the empirical magnitude of the drop in consumption at retirement to provide an advantageous method of identifying structural parameters--- most importantly, the intertemporal elasticity of substitution.

Country of focus: United States of America.

Browse | Search : All Pubs | Next