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Household consumption and home production at retirement in Thailand: evidence from a regression discontinuity approach

Published online by Cambridge University Press:  07 January 2022

Sasiwooth Wongmonta
Sasiwooth Wongmonta*
Affiliation:
Department of Economics, Faculty of Humanities and Social Sciences, Burapha Universty, Chonburi, 20131, Thailand
*
Corresponding author. E-mail: [email protected]
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Abstract

This paper uses Socio-Economic Surveys covering the period from 2013 to 2019 and the 2015 Time Use Survey to investigate the extent to which household consumption changes at retirement in Thailand. A fuzzy regression discontinuity design is applied to evaluate the retirement effect on total household expenditure and expenditures on four major categories: food-at-home, work-related items, non-durable entertainment, and others. The results reveal that retirement decreases household expenditure by 11%. Further investigations show that the dramatic declines in expenditures on work-related and non-durable entertainment contribute significantly to the spending drop at retirement. The magnitudes of the declines are more pronounced for low-income and low-wealth households. The results also indicate that the retirees spend more leisure time on home production activities after retirement. Once accounting for this effect, it finds that the drop in total household expenditure decreases to 6%. These results suggest that the sizable consumption expenditure drop at retirement is due to substituting away from market purchased goods toward home-produced goods.

Keywords

Consumptionhome productionregression discontinuityretirementThailand

JEL classification

D12: Consumer Economics: Empirical Analysis J22: Time Allocation and Labor Supply J14: Economics of the Elderly • Economics of the Handicapped • Non-Labor Market Discrimination J26: Retirement • Retirement Policies
Type
Research Paper
Information
Journal of Demographic Economics , Volume 88 , Issue 4 , December 2022 , pp. 563 - 587
Copyright
Copyright © Université catholique de Louvain 2022

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