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Age and Generation effects on Consumption Levels and Structure

Marceline Bodier

Summary

The French population is steadily aging, and many observers emphasize the potential future role of consumption by the category now referred to as the «new seniors.» Indeed, for most French people, the onset of retirement no longer automatically implies a drop in living standards. Back in 1990, the living standards of households aged over 60 were, on average, 10% higher than those of households under 60. This contradicts the earlier studies suggesting a decline in consumption with age. The population structure has been distorted by the growth of categories combining high living standards and (in principle) low consumption. This shift creates strong uncertainties regarding the pattern of household consumption in the decades ahead. The above-mentioned studies, however, compare different generations at the same date. By tracking samples of identical household cohorts as they age, we obtain a different picture, which clearly distinguishes the age-specific effect from the effect of belonging to a given generation. We accordingly find a weaker impact of population aging on consumption. One significant age-related distortion of the consumption structure is the rise in the consumption of leisure goods and services after retirement.

August 1999 - n°324-325

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