UM21-13: Heterogeneity in Household Spending and Well-being on Retirement
Understanding how households’ living standards transition as they move into and through retirement is crucial for the design of Social Security. A key indicator of whether households have adequately saved to maintain living standards in retirement is how their consumption patterns shift when they stop work. There is controversy in the existing literature about whether total consumption falls at retirement, what happens to different types of consumption expenditure, and how this interacts with increased leisure time. This project proposes to provide novel evidence on diversity in the dynamics of separated consumption and leisure measures around retirement, focusing on how patterns vary with a life-time earnings measure.