Abstract:
The study investigated the extent to which SSNIT pensioners in Ajumako-Enyan-Essiam
(AEE) district smooth and sustain consumption expenditure on nondurable goods and
further analysed how the main determinants of consumption influence expenditure on
nondurable goods at retirement. A total of 164 SSNIT pensioners who were household
heads and aged 58 to 64 years were used for the study. Data for the study which was
collected in March 2019 was mainly primary data covering the period 2015 to 2019. The
data set comprised total wealth from SSNIT, monthly consumption expenditures and extra
income earned monthly. The difference in the means of consumption before and at
retirement were used to compute change in consumption expenditure while the ratios of
consumption to income were used for the expenditure sustainability analysis. Pension
wealth, other source of income, age, number of dependents, sex, accommodation status and
marital status were used as independent variables to predict consumption expenditure as
the dependent variable using the White Robust Standard Errors of OLS. The results showed
a 22.6% drop in consumption expenditure at retirement and 62.8% of pensioners being able
to sustain consumption expenditure. Moreover, the regression results showed that with the
exception of gender and accommodation status, pension wealth, other source of income,
age, number of dependents and marital status emerged as determinants of consumption that
significantly influence expenditure on nondurable goods. Conclusion drawn rendered the
prediction of the life cycle hypothesis invalid in AEE district since consumption was found
not to have been smoothed at retirement. The study recommends to the Government of
Ghana to collaborate with SSNIT to concurrently adjust the minimum pension with
minimum wage reviews in order to enable pensioners adjust themselves to current cost of
living to be able to alleviate post-retirement poverty in the study district and Ghana in
general. Employees are also advised to plan early and save enough resources in their
working life before they retire.
Description:
A thesis presented to the Department of Economics Education, Faculty of Social
Sciences Education, submitted to the School of Graduate Studies in partial
fulfilment
of the requirements for the award of the degree of
Master of Philosophy
(Economics)
in the University of Education, Winneba
JULY, 2019