”TIME TO COOK”: Evidence from Spain on how retired men and women spend their time and money

A fall in people’s spending on groceries when they retire does not necessarily mean that they are consuming less food. According to research by Maria Jose Luengo Prado and Almudena Sevilla, retired people are able to save money by cooking more and spending more time shopping for bargains. In essence, their study, which is published in the June 2013 issue of the Economic Journal, shows that retirement allows people to replace some market goods with home-produced goods.


Analysing data from surveys of expenditure and time use in Spain, the researchers find that since the mid-1990s, Spanish men have been doing more cooking and shopping when they retire. This allows households to reduce their spending on food by about 13%. A fifth of the decrease is attributable to households paying lower prices for the same goods, while the rest is due to changes in what goes in their shopping baskets – for example, purchasing more unprocessed products, which they cook themselves.


The Spanish case is particularly interesting because, unlike in the UK and the United States, household income does not fall at retirement for a large fraction of households. Pension replacement rates are high in Spain and minimum pensions are such that household income actually increases at retirement for those in the bottom quartile of the pre-retirement income distribution.


This means that the authors can rule out alternative explanations, such as insufficient savings – which might be relevant in the UK and the United States, where income does decline with retirement and where there is evidence of a similar decline in food expenditure at retirement.


The Spanish study follows people over time as they retire, gathering information on money spent on a broad selection of goods and services, not just food. The results show that total expenditure does not decline with retirement and that food expenditure declines for households entering retirement only after the late 1990s.


Additional time diary information from the 2002 Spanish Time Use Survey reveals that retired men devote more time to shopping and more time to cooking activities – 53 and 27 more minutes a week respectively – which can account for the lower prices paid.


The authors conclude that Spanish expenditure patterns on retirement are linked to evolving attitudes towards the roles of men and women in the household, for example, who is responsible for doing the housework. The study uses information on attitudes from the International Social Survey Program to reveal that gender norms changed in Spain between 1985 and 2004: men and women developed more egalitarian attitudes and men took over a greater share of domestic tasks.


This change in attitudes can explain why although food expenditure declined after people retire from the late 1990s, it did not for those who retired in the 1980s. In the 1980s, women continued to do most household chores even after men retired – so household expenditure and time use patterns did not change on retirement.


The authors argue that more egalitarian social norms in the later period may have allowed spouses to reallocate time resources on retirement, resulting in the substitution of market goods with home-produced goods and the observed drop in food expenditure, albeit not necessarily food consumption.


This research highlights the relevance of couples’ dynamics for understanding economy-wide phenomena. In Spain, as in other developed countries, the sharp increase in female labour force participation over the 1990s brought changes in gender roles that resulted in men spending more time cooking and shopping after retirement. Policy-makers might not need to be alarmed by expenditure declines at retirement and must understand that families can to some extent interchange time and money.


‘Time to Cook: Expenditure at Retirement in Spain’ by Maria Jose Luengo-Prado and Almudena Sevilla is published in the June 2013 issue of the Economic Journal. This article is available for free. The sample for the analysis includes roughly 800 households living in Spain during the period 1985-2004 with heads aged 59-70 and stable marital status, who were in the labour force when first interviewed and retired while in the survey.


These respondents are a subset of households in the Spanish Expenditure Survey (Encuesta Continua de Presupuestos Familiares) produced by the Spanish Instituto Nacional de Estadística (INE). Supplemental data on Spanish households from the Spanish time-use survey from the INE and the Social Survey Program are also analysed.


Dr Maria Jose Luengo Prado is an associate professor of economics at Northeastern University in the United States. Her research fields include consumption and savings, macroeconomics, housing and education (http://www.luengoprado.net/).


Dr Almudena Sevilla-Sanz is a senior lecturer in economics based in the School of Business Management at Queen Mary, University of London. She is an applied microeconomist whose research interests include household and population economics, economics of time use, consumption theory, labour economics and wellbeing (http://www.busman.qmul.ac.uk/staff/sevillaa.html).