The Retirement Consumption Puzzle: Evidences for Brazil and the State of Rio Grande Do Sul

Abstract

Abstract:The life cycle/permanent income theories predict that consumption would be constant over time but such result has been challenged by some empirical studies which show a systemic decrease in consumption at retirement. This paper aims to investigate the so-called retirement consumption puzzle for Brazil and the State of Rio Grande do Sul. We estimated consumption functions controlling age effects for 12 composite goods using information from the 2008-2009 Household Budget Survey. The results showed that households' expenditures systematic decrease with age for 7 composite goods (food, clothing, transport, hygiene, education, recreation and miscellaneous) and increase with age for 2 composite good (health care and housing). The patterns found to the households' expenditures by age structure brings evidence of retirement consumption puzzle in Brazil.Keywords: Households behavior. Demographics. Retirement consumption puzzle. Resumo:As teorias da renda permanente e do ciclo de vida predizem que o consumo é uma variável constante ao longo do tempo, porém esse resultado tem sido desafiado pelas evidencias empíricas de alguns estudos que mostram uma redução sistemática no consumo das famílias na aposentadoria. O objetivo do presente artigo é investigar o chamado enigma do consumo na aposentadoria para o caso do Brasil e do Estado do Rio Grande do Sul. Para tanto, a partir dada base de dados da Pesquisa de Orçamentos Familiares

Essays on households\' consumption and saving

“…To the best of our knowledge, the only study that addressed this question for Brazilian households is Stampe et al (2017), analyzing consumption expenditure across household ages. The authors reported decreases in a few categories of expenditures as the population ages but did not examine the retirement puzzle directly.…”