John Laitner

Department of Economics
University of Michigan
611 Tappan Street
311 Lorch Hall
Ann Arbor, MI 48109-1220
Tel: 734/763-9620
Fax: 734/764-2769

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
NBER Program Affiliations: AG
NBER Affiliation: Research Associate
Institutional Affiliation: University of Michigan

NBER Working Papers and Publications

October 2014Annuitized Wealth and Post-Retirement Saving
with Daniel Silverman, Dmitriy Stolyarov: w20547
We introduce a tractable model of post-retirement saving behavior in which households have a precautionary motive arising from uninsured health status risks. The model distinguishes between annuitized and non-annuitized wealth, emphasizes the importance of asset composition in determining optimal household behavior, and includes an extension allowing late-in-life exchange transactions among relatives. We consider three puzzles in micro data - rising cohort average wealth of retirees, lack of demand for market annuities, and the relative scarcity of bequests - and show that our model can provide intuitive explanations for each.
March 2005Estimating Life-Cycle Parameters from Consumption Behavior at Retirement
with Dan Silverman: w11163
Using pseudo-panel data, we estimate the structural parameters of a life--cycle consumption model with discrete labor supply choice. A focus of our analysis is the abrupt drop in consumption upon retirement for a typical household. The literature sometimes refers to the drop, which in the U.S. Consumer Expenditure Survey we estimate to be approximately 16%, as the "retirement--consumption puzzle." Although a downward step in consumption at retirement contradicts predictions from life--cycle models with additively separable consumption and leisure, or with continuous work-hour options, a consumption jump is consistent with a setup having nonseparable preferences over consumption and leisure and requiring discrete work choices. This paper specifies a life--cycle model with these ...

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