The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach

摘要

In this paper we have investigated the size of the consumption drop in Italy due to retirement. We have used micro data covering the 1993-2004 period on food and nondurable household spending, and evaluated the causal effect of retirement on consumption by exploiting the exogenous variability in pension eligibility to correct for the endogenous nature of the retirement decision. We have taken a regression discontinuity design approach, and made the identifying assumption that consumption would be the same around the threshold for pension eligibility if the individual would not retire.