In the "Review of Economics of the Household", 2022, vol. 20(1), pages 305-330, March.
Keywords: consumption smoothing, retirement-consumption puzzle, SOEP
Download: Open access at the journal site. DOI information: 10.1007/s11150-021-09569-4
Older versions had the title "Housing consumption after retirement: Is there a puzzle?", for example that's the title which appeared in the programme of the Econometric Society World Congress 2010.
Abstract: Foreseeable income reductions around retirement should not affect aggregate consumption. However, given higher leisure endowments after retirement, theory also predicts lower consumption of leisure substitutes. To avoid misinterpreting this predicted drop as a puzzle, our novel approach focuses on housing consumption (complementary to leisure in utility) and controls for leisure changes. In Germany tenants represent roughly half of all households, making many housing expenditures directly observable in micro data. We find significant negative impacts of the retirement status on housing consumption, which is hard to reconcile with life-cycle theory. Despite the lock-in nature of past housing decisions, income reductions at retirement have additional – though small – effects on housing.
(Latest update: January 2026)