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. In this project we propose to provide novel evidence on heterogeneity in the dynamics of disaggregated measures of consumption and leisure around retirement, focusing on how patterns vary with a measure of life-time earnings.