Do consumers respond to future income shocks? Evidence from social security reform in Taiwan

• 成果类型: Article
• 署名作者: Levenson, AR
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/0047-2727(95)01571-X
• 发表日期: 1996
• 页码: 275-295
• 关键词: Social Security; consumption; permanent income; life cycle

摘要

A prediction of the basic permanent income hypothesis/life cycle model is that an unexpected increase in future income produces an immediate increase in current consumption. This paper tests that prediction using data from Taiwan. The 1985 Labor Standards Law granted all employees in covered industries a windfall retirement/severance benefit. My results indicate that consumption did not increase immediately for those who were granted the windfall, relative to those who received no windfall. Moreover, consumption for those receiving a greater windfall did not increase relative to those who were granted less.