Life-cycle Income Hypothesis Research Articles

LIFE-CYCLE INCOME HYPOTHESIS AND DEMOGRAPHIC STRUCTURE: A SEMI-NONPARAMETRIC ANALYSIS USING A PANEL OF COUNTRIES

In this paper, we attempt to determine whether the life-cycle income (LCI) hypothesis can explain movements in the national savings rate using the panel data of countries and the semi-nonparametric approach. While relating movements in the population density function to movements in the national savings rate, we are able to estimate the age response function with a high level of precision, and the estimated age response function is hump-shaped, which is generally consistent with the prediction from the LCI hypothesis. Running time-series regressions separately for individual countries, we also demonstrate that the estimated age response functions are consistent with the LCI hypothesis in a large proportion of countries, despite limited observations in a variety of countries. Finally, our time-series and cross-sectional analysis results imply that the LCI hypothesis is more likely to hold in a country wherein the growth rate of per capita GDP and the growth rate of population are high.

The Relationship Between Housing Cost Burden and Health Status of Older Adults in the United States

An increasing number of adults are entering retirement with mortgage debt. The dual relationship between housing cost burden and self-reported health among adults age 65 and older in the U.S. was examined using the 2004 and 2006 waves of the Health and Retirement Study. The results of a two-stage probit least squares regression indicated no significant relationship between housing cost burden and self-reported health. However, education, assets, and participating in regular physical activity in 2004 were significant to the probability of reporting being in good health in 2006; and, race/ethnicity, marital status, employment status, and type of health insurance in 2004 were significant predictors of level of housing cost burden in 2006. The Life Cycle Income Hypothesis was used to understand these relationships.

Consumption Theories and Consumers' Assessments of Subjective Well‐Being

The purpose of this research is to examine the relationship between psychological well‐being and objective, economic well‐being as measured using three different economic theories of consumption behavior. The theories examined are the life cycle income hypothesis, the relative income hypothesis, and a resource deficit hypothesis. The results from analyses of the Wisconsin Basic Needs Study data demonstrate the importance of careful economic variable construction and support the economic presumption that income and life satisfaction are positively related. The relative income hypothesis model accounts for the greatest explained variance and is also superior in that it is easier to specify.

Age and wealth: a cross/within‐cohort analysis

The Life Cycle Income Hypothesis (LIH) suggests specific wealth accumulation/decumulation behaviour. The purpose of this study was to determine whether empirical support for the LIH existed among a group of respondents as they entered the retirement stage of life. Results indicate that the appropriateness of the LIH as an explanatory theory of wealth accumulation/decumulation is contingent on how wealth is defined.