(UM14-06) - The Effect of Wealth Shocks in the Great Recession on Time-use and Budget Shares.
Michael Hurd and Susann Rohwedder
Assessing economic preparation for retirement has relied on measures of income and wealth. However, retired persons have considerably more time available than workers. Some research has suggested that retired persons use their additional time to substitute for purchased goods and services, effectively increasing their well-being beyond what their spending would indicate. We aim to expand on this research by using data on time-use with data on categories of spending. The combination can show substitutions or complements of time for spending. We propose to study time-use and budget shares in panel data to reveal life-cycle patterns, and then to use wealth shocks induced by the Great Recession to separate life-cycle from wealth effects, showing how households were able to use time to offset partially their wealth losses.