AccScience Publishing / IJPS / Volume 4 / Issue 1 / DOI: 10.18063/ijps.v4i1.420

Does retirement affect alcohol expenditure? Evidence from urban Chinese older adults in 2002-2009

Hong Zou1 Bingjiang Luan1 Kaizhi Yu2 Hongwei Xu3*
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1 School of Economics, Southwestern University of Finance and Economics, China
2 School of Statistics, Southwestern University of Finance and Economics, China
3 Institute for Social Research, University of Michigan, United States
IJPS 2018, 4(1), 10–23;
© Invalid date by the Authors. Licensee AccScience Publishing, Singapore. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution -Noncommercial 4.0 International License (CC BY-NC 4.0) ( )

Exploiting China’s mandatory retirement policy, we used fuzzy regression discontinuity design to estimate the effect of retirement on household alcohol expenditure among urban Chinese older adults ages 50–70. Drawing on data from the Urban Household Survey of China Statistics Bureau for the period of 2002–2009, we found that having a retired male household head significantly reduced total household expenditure on alcohol by 32%. After breaking down by different types of alcohol, we found that the retirement effect was largely driven by expenditure on liquor. We explored two potential mechanisms that may explain the retirement effect. The first mechanism relates to decreased disposable income after retirement and the second mechanism involves reduced demand of social drinking after retirement. Our findings suggest that the urban Chinese older adults experience substantial change in such health behavior as drinking as they retire. This has important public policy implications as China is facing a severe challenge of rapid population aging.

alcohol expenditure
regression discontinuity design

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