An Exploration of the Changes in Consumption Expenditure of the Retired Households in South Korea

Abstract

This study analyzed the changes in household consumption expenditure of retired households using Korean panel data. We compared the pre and post retirement-consumption levels in different consumption categories using panel data. Paired t-test showed that changes in the consumption patterns before and after retirement were not significant except for the households in the third net worth quartile. Analyzing the effect of retirement on the level of household consumption expenditure, this study found that the effect of retirement was not significant in overall, although retirement had a negative effect on the level of consumption expenditure among households in the lowest net worth distribution. Understanding changes in consumption patterns of retiring households provides important information to design social security policies.