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dc.contributor.authorLaitner, John P.
dc.contributor.authorSilverman, Daniel
dc.date.accessioned2007-04-24T19:42:47Z
dc.date.available2007-04-24T19:42:47Z
dc.date.issued2005-02
dc.identifier.urihttps://hdl.handle.net/2027.42/50520
dc.description.abstractUsing 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.en
dc.description.sponsorshipSocial Security Administrationen
dc.format.extent451202 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.publisherMichigan Retirement Research Center, University of Michigan, P.O. Box 1248, Ann Arbor, MI 48104en
dc.relation.ispartofseriesWP 2005-099en
dc.titleEstimating Life-Cycle Parameters from Consumption Behavior at Retirementen
dc.typeWorking Paperen
dc.subject.hlbsecondlevelPopulation and Demography
dc.subject.hlbtoplevelSocial Sciences
dc.contributor.affiliationumMRRCen
dc.contributor.affiliationumcampusAnn Arboren
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/50520/1/wp099.pdfen_US
dc.owningcollnameRetirement Research Center, Michigan (MRRC)


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