CitationNivorozhkin, Anton (2010). The retirement consumption puzzle: evidence from urban Russia. Institute for Employment Research Working Paper.
AbstractIn this paper we investigate the size of the consumption drop in Russia. We use microdata on the household consumption of food and non-durables collected during the survey of household welfare and participation in social programs (NOBUS). We use the regression discontinuity design, and impose an identifying assumption that consumption would be the same around the threshold of pension eligibility if individuals did not retire. In our data
a significant fraction of individuals stop working after reaching retirement age. We estimate that a 20.6 percent
drop in consumption is associated with retirement induced by eligibility. We show that the fall in consumption is offset by labor supply decisions and government subsidies. We also present evidence that households adapt rapidly to changing economic situations.