The impact of retirement on household consumption in Japan

Stephens, Melvin, and Unayama, Takashi-The impact of retirement on household consumption in Japan Using monthly data from the Japanese Family Income and Expenditure Survey, we examine the impact of retirement on household consumption. We find little evidence of an immediate change in consumption at retirement, on average, in Japan. However, we find a decrease in consumption at retirement for low income households that is concentrated in food and work-related consumption. The availability of substantial retirement bonuses to a large share of Japanese retirees may help smooth consumption at retirement. We find that those households that are more likely to receive such bonuses experience a short-run consumption increase at retirement. However, among households that are less likely to receive a retirement bonus, we find that consumption decreases at retirement. J. Japanese Int. Economies 26 (1) (2012) 62-83. Department of Economics, University of Michigan, 611 Tappan St., 341 Lorch Hall, Ann Arbor, MI 48109-1220, United States; Graduate School of Economics, Kobe University, Nada-ku Rokko-dai 2-1, Kobe, Japan. (C) 2011 Elsevier Inc. All rights reserved.