Intertemporal and intratemporal consumption smoothing at retirement: Micro evidence from detailed spending and time use data

Using detailed spending and time use data from the Netherlands, a country with high mandatory pension savings, this paper analyzes the role of intertemporal and intratemporal substitution to smooth consumption at retirement. We do not find empirical evidence for drops in total nondurable spending. Our estimates suggest increases in leisure-complementary spending at retirement, but no substitution of spending by home production despite increases in time spend in home production. We link our estimation results to implied intertemporal and intratemporal elasticities and conclude that our empirical results imply elasticities below unity and close to one in a simple Life-Cycle Model, respectively.