Flavia Coda Moscarola
- Università di Torino & CeRP- Collegio Carlo Alberto
Monday, April 18, 2011
Biblioteca DSE, Palazzina 32 ex caserma Passalacqua
In this work we revisit the retirement consumption puzzle in Italy. Existing literature explains the consumption drop with work-related expenditures and/or, out of the life cycle framework, with the increase at retirement in the home production (Miniaci et al. 2010, Battistin et al. 2009). A less studied hypothesis attributes instead consumption drop to shocks at retirement, in particular income shocks. Using an Euler equation approach, we test the impact of income shocks on the consumption patterns of individuals around the age of retirement by using the panel component of the Survey of Household Income and Wealth. We furthermore investigate the heterogeneous behaviour of individuals with different educational levels. We find evidence for a consumption drop, unexplained by unexpected RR, only for individuals with low educational level.