Retirement and Household Expenditure in Turbulent Times

Abstract

We examine how expenditure changes at retirement during an institutionally and economically uncertain period when a series of pension reforms and cuts were implemented. Overall, we fail to confirm that consumption declines at retirement using data from Greece (2008-2018). Any estimated declines come from turbulent years when major pension cuts were applied. Expenditure drops at retirement were due to pension income shocks, especially for those who were particularly dependent on pension income. Further checks support the presence of an income shock mechanism for retirees who are relatively more treated during the crisis sub-period. Given an aging population and the ongoing global turbulence, our results offer valuable insights.